Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

BRITISH RAILWAYS BILL

Lords Amendments agreed to.

Oral Answers to Questions — WALES

Referendum

Mr. Knox: asked the Secretary of State for Wales what representations he has received to give financial assistance to both sides in the referendum to be held on 1st March 1979 under the Wales Act.

The Secretary of State for Wales (Mr. John Morris): Other than in the course of discussion of the Wales Bill in this House, I have received no representations.

Mr. Knox: Will the Secretary of State reconsider his attitude to the granting of financial aid to both sides in the campaign? Does he accept that it is important that everything about a referendum should be seen to be fair? Would it not help to convince people that it was fair if both sides had financial assistance, as indeed happened in the EEC referendum?

Mr. Morris: Whether it be right or wrong, there is no provision for that in the Wales Act or the Scotland Act, and it would require primary legislation.

Mr. Geraint Howells: Is the Secretary of State able to say when the result of the referndum will be announced? If the majority of the Welsh people vote in favour, and if we do not get the 40 per cent. required, what representations will the Secretary of State make to the Prime Minister?

Mr. Morris: As regards the timing of the declarations, I assume that they will be made as soon as possible after the count. I shall appoint a chief counting officer for the whole of Wales, and I am sure that it will be part of his function to expedite the count as rapidly as possible. Thereafter, the Act lays down that certain orders have to be made.

Mr. loan Evans: Will my right hon. and learned Friend, or one of his colleagues in the Government, be having discussions with the BBC and the IBA to,


ensure that the case for and the case against an Assembly are given equal time on both channels?

Mr. Morris: I am aware of the concern about this issue on both sides of the House. It is for the broadcasting authorities to decide whether to allocate time to campaign organisations. The broadcasting authorities have an obligation to ensure that, so far as possible, due impartiality is preserved in broadcasting.

Oral Answers to Questions — Public Services

Sir Anthony Meyer: asked the Secretary of State for Wales what discussions he has had with the heads of nationalised industries and public services, with the Welsh Trades Union Congress and with employers' organisations in Wales, with a view to ensuring the continued functioning of essential public services in the event of industrial action or other emergency affecting these services.

Mr. John Morris: I have had no such discussions.

Sir A. Meyer: In view of the fate of the seven Rhyl firemen who persisted in ensuring the safety of the public in breach of a strike, what advice would the right hon. and learned Gentleman give to others who might find themselves in a similar predicament in a strike in some essential service?

Mr. Morris: I understand that the hon. Gentleman and, I think, others have tabled a motion about the responsibility of responsible Ministers. The responsible Minister in this context is my right hon. Friend the Home Secretary, and I am sure that the hon. Gentleman would wish to address his remarks to him.

Oral Answers to Questions — Interest Rates

Nicholas Edwards: asked the Secretary of State for Wales if he will ask the Welsh Council to prepare a report on the impact of high interest rates on the economy of Wales.

Mr. John Morris: No, Sir. It is for the Council itself to decide what matters it wishes to consider.

Mr. Edwards: What does the Secretary of State think the consequences of these interest rates will be on Welsh business and on investment in Welsh business?

Mr. Morris: The hon. Gentleman must make up his mind whether he wishes to help or to sabotage the fight against inflation and the national recovery. I should have thought that, as a matter of confidence, it was in the interests of business that there should be restraint at present to ensure that we could make a further step forward.

Mr. Edwards: Will not these high interest rates halt investment, cause bankruptcies and increase unemployment in Wales?

Mr. Morris: I am sure that the hon. Gentleman must be aware of the reasons for this decision. There were factors—

Mr. Edwards: Excessive Government spending.

Mr. Morris: The hon. Gentleman must restrain himself. If he wants to hear the answer he must not speak from a sedentary position and in an uncivil fashion. He must be aware that there have been increases in interest rates throughout the world. That factor had to be borne in mind, and there was a need to restrain monetary expansion because we wanted to keep inflation down. The hon. Gentleman must make up his mind about whether he wants to sabotage the recovery of this country.

Oral Answers to Questions — Perinatal Mortality

Mr. Abse: asked the Secretary of State for Wales what are the present perinatal mortality rates in Wales and in each local area health authority in Wales; how these rates compare in Oxfordshire and England; whether he is satisfied with the action taken by area health authorities in the Oppé report; and what action he is taking to reduce perinatal mortality rates.

The Under-Secretary of State for Wales (Mr. Barry Jones): I will, with permission, circulate the statistical information in the Official Report. Perinatal mortality rates for 1977 in the Welsh health authority areas are all higher than those in Oxfordshire, which is exceptionally low. Half of them are lower than the rate for England.
Health authorities in Wales take seriously the problem of mortality of the newborn and have been taking appropriate action since the Oppé report was


commended to them. My Department is in continual contact with them about the provision of maternity services and child care. In addition, last year my right hon. and learned Friend, with the other health Ministers, published the booklet "Reducing the Risk" aimed at helping prevent infant mortality and handicap.

Mr. Abse: Is it not chastening that a woman in some areas of South Wales and, I understand, in Clwyd would be twice as likely to endure the tragedy of losing her child than she would if she lived in Oxfordshire? How, in the circumstances, does the Minister justify what appears to be the case, namely, that guidelines have been given by the Welsh Office which suggest that in real terms there should be a reduction in the amount of expenditure on maternity services in Wales? Is it not time that we stopped using the old alibi of social deprivation to explain away our appalling infantile mortality rates and recognise that there is a real need for more research and, even more important, for the mobilisation of effort to end the present situation?

Mr. Barry Jones: There will be every mobilisation of effort. There is no complacency in the Department. My hon. Friend's statistics can show certain conclusions, perhaps, but not"twice as likely." Overall, the figures for Wales have improved considerably since 1973. However, we are studying the feasibility of an intensive care unit for Wales, possibly in the Cardiff area, and my right hon. and learned Friend is studying ways and means of more effective action to prevent the occurrence of these regrettable rates.

Following is the information:


Area
Perinatal mortality rate 1977


Clwyd
15·6


Dyfed
16·3


Gwent
20·7


Gwynedd
17·4


Mid-Glamorgan
19·7


Powys
13·6


South Glamorgan
15·2


West Glamorgan
19·3


Wales
17·8

Oral Answers to Questions — Mortgage Interest Rates

Mr. Wyn Roberts: asked the Secretary of State for Wales what estimate he has made of the impact of the recent increase in house mortgage rates on private sector building and sales over the next six months.

The Under-Secretary of State for Wales (Mr. Alec Jones): Private sector starts to the end of September are 9 per cent. up on the same period last year. I doubt if the increase in mortgage interest rates will greatly affect the level of lending by building societies, if at all.

Mr. Robert: Is not the Minister aware that the level of new applications for mortgages is already falling in Wales as a result of this record increase of 2 per cent. in mortgage interest rates? Is it not likely that the total figure for this year of private house building will be very low, although it will be up, perhaps, on that of last year, which was a very low level indeed?

Mr. Alec Jones: It seems that in 1978 building societies are likely to promise as many home loans as they did in 1977, which in itself was an all-time record for a single year. My right hon. Friend the Secretary of State for the Environment announced in the House last Friday that the level of lending for the first quarter of next year will be £2,100 million. That at least should encourage the building industry to build houses.

Oral Answers to Questions — Coal Industry

Mr. Ioan Evans: asked the Secretary of State for Wales what representations he intends to make to the tripartite investigation into the special problems facing the coal industry in South Wales.

Mr. John Morris: My aim is to ensure that all proposals which will help to secure a thriving coal industry in South Wales are thoroughly examined.

Mr. Evans: Does my right hon. and learned Friend agree that there has been a general welcome for the Government's decision to set up this tripartite committee? As his colleague the Under-Secretary of State will be serving on that committee, will my right hon. and learned Friend ask him to make representations to avoid the closure of the Deep Duffryn colliery in Mountain Ash? At the same time, will my right hon. and learned Friend express disapproval of the activities of the dirty tricks department of Plaid Cymru in releasing a confidential document which was sent by the National Union of Mineworkers to Labour Members in this House, which was obtained by Plaid Cymru by devious means?

Mr. Morris: I am glad that my hon. Friend welcomes the tripartite committee, which was announced when he initiated a debate in the House. The membership will be announced today. It will have its first meeting on 14th December, which underlines the urgency of the task of looking at ways by which we can ensure exploration for and exploitation of coal in South Wales, ensure that mining skills are used to the full, that job opportunities are maintained, that coalfields are put on a viable financial footing and that the effects of closures and the social consequences thereof are considered.
As regards Deep Duffryn, I am aware of my hon. Friend's concern. The matter is now subject to appeal.
As regards what my hon. Friend terms a dirty tricks department, or whatever, it is not for me to answer for Plaid Cymru. All I say is that Mr. Philip Weekes has come out loud and clear about the substantial and significant inaccuracies in this document, in that one pit had already been closed, two had recently had major financial investment, and the call for Government action was made one week after the tripartite group had been set up.

Mr. Gwynfor Evans: Is the right hon. and learned Gentleman in a position to make a categorical denial that there is any truth in the report which seems to have emanated from the NUM that 10 or 11 pits are to close? If pits in Wales were to close on that scale, we should return to the situation of 1964 to 1970, when one pit was closed, on average, every seven weeks.

Mr. Morris: If the hon. Gentleman is genuinely concerned with the future of the coal industry, I should have thought that he would have welcomed the setting up of this tripartite committee. It consists of distinguished members of the NUM, the National Coal Board and two or three Ministers, including my hon. Friend the Under-Secretary of State, and they are deeply and passionately concerned with the future of the coal industry.
What is important is to ensure that one looks at the possibility of new investment in South Wales. As a constituency Member, I am deeply concerned about this. Secondly, in view of geological fac-

tors in Wales, which over recent years, regrettably, we have known very well, we must ensure that the social consequences are adequately examined.

Oral Answers to Questions — Vehicle Excise Duty

Mr. Grist: asked the Secretary of State for Wales whether his Department has estimated the economic effects in Wales of the proposed abolition of road tax.

Mr. John Morris: These cannot be measured with precision; but I do not believe that they will be substantial.

Mr. Grist: Does the Secretary of State realise that that is an extraordinary reply? Does he not understand that Wales, being distant from its main markets, will suffer because the costs of industry in Wales will rise in reaching those markets and that that will make Wales less attractive to new firms, which will have a damaging effect on employment in Wales?

Mr. Morris: I should have thought that that was a gross exaggeration. The hon. Gentleman may not be aware that diesel driven goods are not affected in any way. He should bear that in mind when he considers industrial factors.
Secondly, many private motorists will benefit from the abolition of road tax. Those who motor about 7,500 miles will benefit. Perhaps the hon. Gentleman will consider that everyone who pays tax now must shoulder the burden for those who do not pay tax—to the extent of £4 each.

Mr. Gwynfor Evans: Is the Secretary of State aware that people in rural areas, who often have to travel long distances to work, would stand to lose if the tax were abolished and the price of petrol was raised by even 10 per cent.? If it was raised by 20 per cent. the loss would be very heavy indeed and would make an impossible hole in the family budget.

Mr. Morris: Of course some people will suffer. Let us have that in the forefront of our minds. But not all people will suffer. A total of 7,500 miles allows a considerable distance for people to travel to work each day. It is only the mileage in excess of that figure for which people will be paying an additional amount that will upset the family budget. I should be the first to concede that people will be


affected. However, the case should not be exaggerated, because there are also substantial benefits.

Mr. Nicholas Edwards: Does the Secretary of State agree that many of the areas that will suffer are precisely those that suffer the biggest handicaps at present in attracting industry and jobs? These areas will suffer because of the long distances involved. Will he look into the matter further?

Mr. Morris: One is always prepared to consider representations. However, I do not think that the hon. Gentleman should lend himself to the gross exaggeration of the case put by his hon. Friend the Member for Cardiff, North (Mr. Grist), because I should have thought that this increase, wherever it occurs, should be kept in balance and seen in its proper perspective, particularly because diesel vehicles will not be affected. As regards other vehicles, it depends on the amount of mileage travelled in one year.

Sir Anthony Meyer: Is it not a fact that those who stand to gain by this change live primarily in seats which the Labour Party might conceivably hope to retain, and that those who stand to lose live in seats which the Labour Party does not stand a hope of retaining?

Mr. Morris: I really must stop encouraging the hon. Gentleman from falling into the gutter so often.

Oral Answers to Questions — Civilian Labour Force

Mr. Michael Roberts: asked the Secretary of State for Wales if he will estimate the growth of the civilian labour force in Wales by 1991.

Mr. John Morris: The latest projection of the future civilian labour force in Wales up to 1991 was published in the Department of Employment Gazette for September 1978. On that assessment, the labour force in Wales is estimated to increase by 179,000 between 1975 and 1991.

0Mr. Roberts: I am grateful to the right hon. and learned Gentleman for that reply because it illustrates the problem facing us in Wales. If the pattern of redundancies over the last four years were to continue, combined with this additional civilian labour force, would he care to

estimate the number of people unemployed in Wales in 10 years' time?

Mr. Morris: The hon. Gentleman must be aware, when he talks of redundancies, that, even though 90,000 redundancies have been declared in Wales since 1974, there are now 13,000 more people in jobs in Wales. That is an indication of the success of the policies of decentralisation, of attracting new industry and of Government intervention to provide jobs for our people.

Mr. loan Evans: Does my right hon. and learned Friend agree that the Welsh Development Agency, working with the National Enterprise Board, will play an important part in the period up to 1991 in attracting employment to Wales? Does he agree also that the additional financial assistance agreed by the Government will go a long way towards achieving that end?

Mr. Morris: My hon. Friend is right. This is why I cannot understand the hypocritical concern of some Opposition Members for the jobless, while at the same time they are loud in their cries against any additional sums of money being made available either for the NEB or the WDA.

Oral Answers to Questions — INDUSTRY

Sector Working Parties

Mr. Hal Miller: asked the Secretary of State for Industry what progress he has to report on the results of the sector working parties; and if he will make a statement.

The Under-Secretary of State for Industry (Mr. Les Huckfield): The sector working parties are working well. They are currently finalising their end-year reports for 1978, which will be presented to the National Economic Development Council in February next year.

Mr. Miller: As the tripartite group on the motor industry last issued a statement in July 1976, will the hon. Gentleman arrange for a further statement on its work to be put in the Library? Can he now tell us the extent of the success that the Government have had in following op the commitment entered into, as reported in that statement?

Mr. Huckfield: I am glad that the hon. Gentleman pays tribute to the work of my right hon. Friend's tripartite working party on the car industry. I shall put his suggestion to my right hon. Friend about some kind of report, but I assure him that the working party is still working and doing good work.

Mr. Madden: Can my hon. Friend say which sector working parties have made any recommendations relating to import substitution, and what action his Department is taking upon such recommendations?

Mr. Huckfield: I am grateful to my hon. Friend for the interest that he has shown in the sector working parties. Not only have many of them made recommendations but they have actually started acting on them. For example; there is the clothing and distributive trades economic development council, which is the sort of working party that my hon. Friend will accept. It has in being a system whereby agents have been identifying imported garments and bringing them to the attention of United Kingdom manufacturers. We know of at least one £50,000 import contract which has been switched to this country as a result of that kind of work. There are other examples.

Mr. Kenneth Clarke: Will the hon. Gentleman confirm that the overwhelming advice of these working parties concerns the need to keep up the profitability of British industry to encourage investment and to reduce the rates of direct taxation, so that people can keep more of the rewards for hard work? Is he aware that until these two things are achieved the Government's industrial strategy is a waste of time?

Mr. Huckfield: I do not think that the hon. Gentleman is really in touch with what is going on. I urge him to look at the recommendations of the sector working parties. For example, the computer sector working party has set up a training scheme for school leavers, the iron and steel sector working party has formed the basis of much of our communication and contact with Commissioner Davignon, the rubber-processing sector working party has produced the basis of a first-class agreement between management and unions for increasing productivity, and the mechanical handling sector working

party has got companies in conveyor manufacturing to establish overseas market offices. Indeed, there is a wide range of recommendations made by sector working parties which are not as simple or as naive as the hon. Gentleman thinks.

Kirkby Workers' Co-operative

Mr. Kenneth Clarke: asked the Secretary of State for Industry whether he will make a statement about Government financial assistance to the Kirkby workers' co-operative.

Mr. Les Huckfield: My Department has made £4.915 million available to Kirkby Manufacturing and Engineering Co. Ltd. in selective assistance under section 7 of the Industry Act 1972. The negotiations based on the recommendation of the working party, which was set up at the request of the directors of KME, have unfortunately collapsed. The interim assistance to KME to enable it to continue trading while the working party completed its report has now ceased.

Mr. Clarke: I am grateful for that reply. Will the hon. Gentleman confirm that there is no question of any more interim assistance being given in this case, because there can be no question of putting in any more taxpayers' money following the £5 million which has already been lost on this abortive enterprise? Will he let us know whether, following the collapse of negotiations with Worcester Engineering and the working party's recommendations, he will agree to call in a receiver so that the assets can be sold to someone and some jobs preserved in a viable enterprise?

Mr. Huckfield: I only wish that hon. Members opposite and the Conservative Party would show as much concern for the preservation of jobs as they do for cutting public spending, except where it affects their own constituencies. My Department is ready to consider any application for assistance which is based upon projects which have viability in them. I hope that the hon. Gentleman will be content to await the outcome of the mass meeting which my right hon. Friend has been addressing on Merseyside this morning.

Mr. Cryer: Does my hon. Friend agree that, although KME has received almost £5 million, the cost to the taxpayer to


keep those 750 jobs going over the same period in lost tax and dole payments—which the Opposition seem to relish giving to other people—would have been about £9 million? Will he urge the Secretary of State to reconvene the working party with a view to retaining the co-operative? Will he accept that private enterprise alternatives are simply a means of grabbing the 10 per cent. of the radiator market that KME has built up, with the accompanying loss of jobs? Will he urge the Secretary of State to set up the working party again and keep the co-operative, which is an important means of keeping jobs in a time of high unemployment and is an important symbol for the trade union and Labour movement?

Mr. Huckfield: I and many of my hon. Friends recognise my hon. Friend's strong feelings on this issue. To date, KME has received £5·672 million. My understanding of the situation emerging from the mass meeting this morning is that Mr. Jack Spriggs may well be coming to us with another proposal on Wednesday.

Mr. Biffen: Does the hon. Gentleman agree that it would be most inappropriate for the National Enterprise Board to be required to take an interest in this venture unless it were of its own volition?

Mr. Huckfield: The hon. Gentleman is correct in so far as the guidelines for the NEB are concerned. Those guidelines advise the Board to have regard to the commercial viability of such investment. This is also a case in which my right hon. Friend has said that he is not prepared to use his powers of direction.

Mr. Heifer: May I draw my hon. Friend's attention to the resolution of the national executive committee of the Labour Party, of which he happens to be a member, which urges the continuation of KME and urges the Government to give it further support in order to put the co-operative on a new basis? Will he indicate whether, following the mass meeting on Wednesday, such could be the attitude of the Government? If not, why not?

Mr. Huckfield: As a fellow member of the NEC of the Labour Party, I recognise the strong feelings among members of that body about this matter. I am un-

able to give a specific answer to my hon. Friend because I have had only a quick and verbal report of what transpired this morning. But, obviously, anything which emerges by way of an application will get the fullest possible consideration from the Government.

Several Hon. Members rose—

Mr. Speaker: Order. I should tell the House that this subject is to be discussed early tomorrow in the debate on the Consolidated Fund Bill.

PRICES AND CONSUMER PROTECTION

Citizens Advice Bureaux

Rear-Admiral Morgan-Giles: asked the Secretary of State for Prices and Consumer Protection when he intends to make his decision concerning future development grants to assist citizens advice bureaux ; and whether he will make a statement.

The Minister of State, Department of Prices and Consumer Protection (Mr. John Fraser): I announced the future of our grant assistance to the National Association of Citizens Advice Bureaux on 16th November in answer to a Question from my hon. Friend the Member for Birmingham, Ladywood (Mr. Sever).

Rear-Admiral Morgan-Giles: Can the Minister say how far ahead the bureaux can look to be assured of their support from the Government? After all, they have a very important job to do.

Mr. Fraser: I agree that they have a very important job to do. That is why this Administration have given them more support in real terms than any previous Administration. There was originally a five-year development grant. That has been extended until 31st March 1981. One would hope to make a review of the advice services and reach other decisions before 1981.

Mr. Ioan Evans: Does my hon. Friend agree that the bureaux are doing an excellent job in informing people of the many increased social benefits that have been introduced by the Government, and that they can deal with many of the problems that would be brought to Members of Parliament if they did not exist?

Mr. Fraser: That is true. Many people would not be receiving the benefits to which they are entitled if they did not have that source of advice. The help of the bureaux will be extremely useful in a forthcoming campaign over rebates, associated not only with fuel costs but with rents and rates.

HOME DEPARTMENT

Fourth Television Channel

Mr. Gwynfor Evans: asked the Secretary of State for the Home Department if he is satisfied with the progress which is being made towards the use of the fourth television channel in Wales as a mainly Welsh-language channel.

The Under-Secretary of State for the Home Department (Dr. Shirley Summerskill): Discussions with the broadcasting authorities are continuing. We hope to make a statement in the near future.

Mr. Evans: Is the Minister aware of the desperate crisis of the Welsh language, a language which is the vehicle of a very rich and ancient culture, whose literature goes back to the sixth century? Does she agree that because of that crisis we need, within months, more children's programmes in Welsh on television and, before the end of 1980 at any rate, 25 to 26 hours a week of Welsh language programmes on the fourth channel in Wales?

Dr. Summerskill: I am aware of the concern of many hon. Members about this matter. I assure them that it is the Government's intention that the Welsh language service should come into operation in the autumn of 1982. We shall be making a statement soon. As regards children's programmes, the BBC is planning for additional programmes to be provided next autumn. I understand that Harlech Television has also announced its intention to increase the amount of children's programmes in the Welsh language at the same time.

Mr. Heifer: Will my hon. Friend have discussions with the broadcasting authorities to try to have Welsh language lessons which can also be broadcast to the rest of the United Kingdom, so that some of us on Merseyside, for example,

who can receive the Welsh language programmes can actually understand them? I can, but not everybody can. It would be a good thing if people in the rest of the British Isles could understand the Welsh language programmes, so that we could be involved in what I agree is a very old language. It is part of our British tradition and something that we should cherish.

Dr. Summerskill: As one who is half Welsh, I respond very warmly to what my hon. Friend suggests. But I invite him to ask the BBC and the IBA whether they would agree to put on more Welsh programmes. We do not interfere with the content of broadcasting.

Mr. Ronald Atkins: Bearing in mind what the Government have said and the efforts that they have made, does my hon. Friend agree that the vitality of a language and culture depends on its inherent strength, and that, despite the fact that so much help has been given to the Welsh language over the years, it continues to decline because it lacks that vitality?

Dr. Summerskill: The fact that the Welsh language is lacking in vitality is not a Government responsibility. I agree that it is a vital language, and the Government will do all that they can to see that those who wish to learn it and to listen to it are able to do so.

CIVIL SERVICE

Dispersal

Mr. Viggers: asked the Minister for the Civil Service what proposals he has to implement the recommendations of the Hardman committee on relocation of Government offices.

Mr. Hal Miller: asked the Minister for the Civil Service how many Civil Service posts have been dispersed so far from outside London as compared with London posts; and what are the relative figures planned for the remainder of the dispersal programme.

The Minister of State, Civil Service Department (Mr. Charles R. Morris): As I advised the hon. Member for Bromsgrove and Redditch (Mr. Miller) on 6th November, the programme of dispersing Civil Service posts announced by the


Government on 30th July 1974, following the Hardman report, is proceeding in accordance with the timetable announced by my right hon. and noble Friend the Lord Privy Seal on 29th July 1977. A total of 4,500 posts have been dispersed so far and these have all gone from the London area. With regard to the balance, I refer the hon. Member to the announcement made by my right hon. Friend the Secretary of State for Defence on 3rd August, which indicated that some of the 1,500 Ministry of Defence posts to be dispersed to the Glasgow Anderston site will move from outside the London area. Apart from the MOD's dispersal to Glasgow, the dispersal programme, as announced, does not provide for moves from outside London.

Mr. Viggers: Does the Minister agree that the Hardman committee recommended the dispersal of jobs from London, whereas the Government are now contemplating something quite different? Does he recognise that when the policy means that jobs are being moved from areas where they are functioning satisfactorily to Glasgow, where people do not wish to go, it is a perversion of the orginal Hardman recommendations?

Mr. Morris: The composition of the MOD dispersal package is essentially a matter for my right hon. Friend the Secretary of State for Defence.

Mr. Miller: But can the Ministry justify dispersing jobs from outside London, from areas which may not be of high employment? Will he tell us once again whether it is posts or people that are being dispersed?

Mr. Morris: It is essentially jobs, not people, that are being dispersed. Up to 5,500 jobs will be going to Glasgow. They will make a significant contribution towards helping to deal with the problems of that area of structural economic difficulty.

Mr. Gordon Wilson: Does the Minister realise that about three years ago 120 jobs were decentralised to Dundee in connection with vehicle registration and other duties? What logic is there in the policy of dispersing jobs if those jobs are to be terminated as a result of the intention to get rid of the vehicle excise duty and replace it with increased petrol taxes?

Mr. Morris: That matter does not relate directly to the Question, but I shall give my attention to it.

Mr. Christopher Price: Does my right hon. Friend realise that the dispersal of the Government Chemist's laboratory and other jobs from London is causing a great deal of chaos in South-East London because it was based on a report—the Hardman report—that is over five years old and has nothing to do with the present situation in South-East London, where unemployment is quite as high as it is in many of the development areas?

Mr. Morris: I agree with my hon. Friend that there are real problems of unemployment in London. But the difficulty in London is the contraction not in service jobs but in manufacturing jobs. I am conscious that the dispersal of the Government Chemist's laboratory will make a contribution to helping to deal with the problems of the areas to which it is being dispersed.

Mr. Hayhoe: What recognition are the Government giving to the changed employment situation in London since the Hardman committee reported? Can the Minister give any indication that the Government have reviewed the position in the light of a drastically changed situation in London?

Mr. Morris: The Government keep their dispersal programme under constant scrutiny and re-examination. But the fact remains that in the regions there is still a serious problem of unemployment. It is to help deal with that problem that the Government are intent on proceeding with their dispersal programme.

Northern Ireland (Recruitment)

Mr. Litterick: asked the Minister for the Civil Service if he will review his Department's recruitment activities in Northern Ireland in the light of the terms of the Fair Employment (Northern Ireland) Act 1976.

Mr. Charles R. Morris: No, Sir, I am satisfied that the recruitment activities of departments of the Home Civil Service in Northern Ireland are fully consistent with the provisions of the Fair Employment (Northern Ireland) Act 1976.

Mr. Litterick: As my right hon. Friend readily accepts that his Department has


a responsibility under the Act to prevent sectarian discrimination in the matter of recruitment, what criteria will he bring to bear in judging the recruiting activities of a Government Department with reference to that Act, as no Government Department has been able to tell me in answer to Questions anything about the religious affiliation of any of its recruits, with the single exception of the Ulster Defence Regiment?

Mr. Morris: I can understand the reluctance of Government Departments and Ministers to get involved in any religious head-counting—

Mr. Litterick: But that is what the Act was all about.

Mr. Morris: Recruitment to Civil Service posts in Northern Ireland is solely on the basis of fair and open competition. It is the cardinal principle of the Civil Service Commissioners' recruitment work that discrimination on grounds of colour, race, sex, religion or politics should be excluded from selection considerations.

Mr. Powell: Does the Minister agree that any policy which leads to the establishment of quotas is bound to be unhelpful from any point of view? It was this danger, implicit in the Fair Employment (Northern Ireland) Act, which caused my hon. Friends and myself to vote against the measure.

Mr. Morris: I do not accept the right hon. Gentleman's interpretation of the Act in that regard.

Mr. Heffer: May I suggest that quotas in any direction, whether they concern the marriage of Royalty or of anyone else, are out in this day and age?

Mr. Morris: I certainly agree that quotas relating to marriage are out.

Mr. Biggs-Davison: Were not quotas rejected by Ministers throughout the passing of the Act in question, just as they have been rejected by the Minister today? Is there any substantial measure of complaint in Northern Ireland about recruitment to the public service? Plenty of people are willing to complain, but I did not think that this was a particular subject of grievance.

Mr. Morris: I agree. I have no evidence to suggest that there is any appre-

ciable measure of complaint about recruitment to the Civil Service in Northern Ireland.

Trade Unions

Mr. Skinner: asked the Minister for the Civil Service when he expects next to meet Civil Service Union leaders; and if he will make a statement.

Mr. Canavan: asked the Minister of State for the Civil Service when he expects next to meet representatives of the Civil Service trade unions.

Mr. Charles R. Morris: I am in frequent contact with representatives of the Civil Service trade unions.

Mr. Skinner: When the Minister meets Civil Service trade union leaders, will he convey to them that the 5 per cent. policy will not be carried out by the Government? It seems clear that that policy has gone out the window, considering all the settlements now being made. Will he consider especially those at the lower end of the Civil Service pay scale, such as those who work behind counters in social security offices? If the Minister and his colleagues think of introducing sanctions against civil servants, they will shut down the Government.

Mr. Morris: The principle on which Civil Service pay is based is that of fair comparison. We are about to receive reports from the Pay Research Unit, and then the negotiations will start. I cannot anticipate the outcome.

Mr. Canavan: Does the Minister agree that wages for public sector workers have declined relative to those of comparable workers in the private sector? This is due to excessive wage restraint, and public sector workers need at least 15 per cent. to bring them up to the standards of comparable workers in the private sector. Will the Government implement fully in April 1979 the salary increases justified by the Pay Research Unit's evidence, especially in respect of the lower paid ranks of the Civil Service?

Mr. Morris: I have noted those points. However, I cannot give any such undertaking at this stage in the negotiations. My hon. Friend may well be right about comparative jobs in the private sector. The report may show that those outside


are paid more. But we cannot comment until we see the report.

Mr. Peter Bottomley: Recognising that these people's wages are being negotiated without the opportunity for a wages drift, and accepting that the PRU report is coming, will the Minister tell us whether the negotiations which begin after the report is received will be about comparability or about a 5 per cent. pay policy?

Mr. Morris: The Government's guidelines, obviously, will be a major factor in the negotiations on which we shall embark in 1979. All the points that the hon. Gentleman has made will be repeated by the distinguished and skilful group of general secretaries of the Civil Service trade unions when the negotiations begin.

Mr. Ioan Evans: As well as talking about salaries and conditions, will my right hon. Friend discuss with Civil Service union leaders whether the youth opportunities programme and the work experience programme are being applied in Government Departments to the extent that is desirable?

Mr. Morris: We have made very little progress in introducing work experience schemes into the Civil Service. I cannot and will not justify this poor progress. The difficulties that we have encountered come from the opposition of one Civil Service union. The Secretary of State for Employment and I have met the president and general secretary of that union and I hope that in the weeks ahead we shall arrive at an accommodation which will enable youngsters to get work experience in the Civil Service.

Mr. Biffen: The Minister's answer to my hon. Friend the Member for Woolwich, West (Mr. Bottomley) was pure equivocation. We want to know which is the greater factor weighing with the Government on Civil Service pay—fair comparison or the 5 per cent. policy. Will the Minister give a straight answer?

Mr. Morris: I shall try to do so. The Government have reactivated the Pay Research Unit. Its work will provide evidence of the movements of comparable jobs in the private sector. The report will be the basis of negotiation. In the very nature of things the Government's guidelines will be a factor in the negotiations.

Mr. Litterick: Is the Minister aware that Civil Service trade union officers in Birmingham have reported that a significant and growing number of executive officers in the Civil Service are having to claim family income supplement and other means-tested benefits? Will he convey to the Treasury the thought that, notwithstanding the 5 per cent. policy limitation on salary increases, there will be a saving on means-tested benefits with any wage increase given to these civil servants?

Mr. Morris: That is a view which the secretary general of the national staff side will consider closely on entering the negotiations.

Retirement

Mr. Greville Janner: asked the Minister for the Civil Service whether he is satisfied with current arrangements for the retirement of civil servants.

Mr. Charles R. Morris: Yes.

Mr. Janner: What is the Government's policy regarding the age at which men and women civil servants may retire? Does the Minister accept that the age should be the same for both? If so, how does he explain the discrepancies in practice between various Government Departments?

Mr. Morris: At 60 an officer, male or female, may retire at his or her wish, or be retired at the instigation of his or her employing Department. There are no inconsistencies in Civil Service retirement policy.

Mr. Hayhoe: As the retirement pension of Civil Servants is so much related to pay, can the Minister now answer clearly the question put to him twice about the Government's attitude to the Pay Research Unit's report and their own guidelines? Is the Minister saying that, on the basis of the PRU reports, the Government will agree to increases outside their guidelines?

Mr. Morris: I have made no such assertion, and certainly I have made no such statement. I have said that in the negotiations the Government must take account of our pay policy. As for Civil Service pensions, as I have no doubt the


hon. Member will recall, the Government Actuary will be looking at the paper deductions for Civil Service pension purposes.

HOUSE OF COMMONS

Broadcasting

Mr. Adley: asked the Lord President of the Council what recent representations he has received about the broadcasting of the proceedings of the House.

The Parliamentary Secretary to the Privy Council Office (Mr. William Price): My right hon. Friend has received no formal representations on this matter recently.

Mr. Adley: Is not that rather surprising, especially in view of the rather unruly scenes in the House last Thursday evening? However, does the Minister recognise that there is criticism but that, nevertheless, this House compares well with, shall we say, the Supreme Soviet? Will the hon. Gentleman do his best, therefore, to ensure that the broadcasting authorities endeavour to educate the public in the difference between this House and other parliaments rather than in the difference between this House and a four-ale bar?

Mr. Price: As one who spends a certain amount of time in four-ale bars, I must say that I do not see very much wrong with that, either. I remind the hon. Member that there is a body comprising both Houses of Parliament which is in existence for the very purpose of discussing any problems which arise over broadcasting. That body has had very little business. One can only draw from that the conclusion that most people in this House are satisfied.

Mr. Buchan: Does my hon. Friend agree that there were no unruly proceedings in this House on Thursday, other than the petulant behaviour of the Tory Front Bench, and that an intelligent exercise in the defence of democracy was carried on by the masses in this House when the Executive had failed to see the right course of action?

Mr. Price: I think that that is right.

Mr. Kenneth Lewis: Is the Minister aware that the public think that there is

a lot of unruly activity in this House? Would it not be just as well if they could see as well as hear it? Is the hon. Gentleman aware, further, that whereas the Opposition consistently listen to the Prime Minister during Prime Minister's Questions, even though we do not get very satisfactory answers from him, Government supporters do not extend the same courtesy to my right hon. Friend the Leader of the Opposition? Will the hon. Member ask the Leader of the House to control his hon. Friends who sit below the Gangway, who hardly ever let my right hon. Friend get in a point?

Mr. Price: I had not found that to be a major problem. Whatever else I might think and say about the Leader of the Opposition, I do not think that there is any doubt about her ability to make her point. There is a difficulty about noise in the Chamber. I got into hot water some months ago for suggesting just that. There is a problem, and I do not think that people always understand fully just how the business of this House is conducted. However, I would prefer to have no broadcasting at all than to have doctored broadcasts.

Members' Salaries

Mr. Hal Miller: asked the Lord President of the Council when he expects to receive the report of the Boyle Committee on Members' salaries.

Mr. William Price: I cannot give a specific date, but I can assure the hon. Member that the review body is aware of the general urgency behind the reference, and in particular of the importance which is attached to completing the recommendations on the parliamentary salary before the annual review date next June.

Mr. Miller: I thank the Minister for that reply. Can he assure the House that the Government will introduce a substantive motion to give effect to the Boyle report? When considering the terms of that motion, will he see that much greater emphasis is placed on salaries and far less on expenses which are always open to misrepresentation, if not abuse?

Mr. Price: We have referred the matter, and we have asked for it to be dealt with as quickly as possible. What


I said in July still holds for the Government. It would be difficult to give a blind commitment to implementing the whole of Boyle at this stage. But we have made it clear that we recognise the problems which exist. There would have to be clear and compelling reasons for the recommendations not to be accepted.

Mr. John Garrett: Does my hon. Friend agree that the Government could take substantial steps to improve the effectiveness of Members of Parliament without waiting for the report of the Boyle committee by, for example, allowing expenditure by individual hon. Members on research assistance to the extent of at least one full-time research assistant, in addition to secretarial support?

Mr. Price: That goes rather wide of the original Question, but my right hon. Friend the Lord President will have heard my hon. Friend's remarks.

Mr. McCrindle: If, for any reason, the Government find it impossible to implement the Boyle report for which we are waiting, can the Minister assure us that it might be possible to implement the last one?

Mr. Price: I have had this job for four and a half years. It is one that I should happily give to anyone who wanted to volunteer for it, but I do not find many people queueing up for it. This is not an easy matter. We have a problem in the country. I believe that the time has come to face it and to do what is necessary.

Members' Duties

Mr. Wall: asked the Lord President of the Council if he will now take steps, by legislation if necessary, to stop the duties of Members of Parliament being interrupted by industrial action.

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): I shall continue to take such steps as are necessary to ensure the proper working of the House, but I do not consider that legislation would be appropriate.

Mr. Wall: Is the right hon. Gentleman aware of the disruption to the work of Members of Parliament caused by repeated industrial action over the years by those employed at Her Majesty's Stationery Office? If Parliament matters to

both the country and the Government, is not it time that the Government took positive action to stop this impedance of the work of Parliament?

Mr. Foot: I accept fully that the disruption which sometimes takes place is a serious matter not only for Members of Parliament but for the public who are concerned about the transaction of our business. I do not minimise that. But I do not believe that legislation is the way to solve the problem.

Mr. Skinner: Will the Leader of the House bear in mind that in the real world a little industrial action here and there does not do any harm, so it should not come amiss to Members of Parliament? Will my right hon. Friend take on board also that if he goes on as he is doing, with a three-month recess in the summer, a month at Christmas, a month at Easter and a month later on, we shall get to a six-month Parliament and there will not be much time for industrial action?

Mr. Foot: I hope that my hon. Friend is not inciting anyone to get it in quickly while there is still a chance. I think that he has extended the dates somewhat. But I do not think that anything my hon. Friend says, even in his more lighthearted moments, should encourage people to believe that the disruption of the flow of supplies of papers to this House is other than a very serious matter.

Mr. Brittan: If the Lord President thinks that that disruption is a very serious matter but takes the view that legislation is not the appropriate way of dealing with it, will he indicate the alternative steps which he proposes to take in the discharge of his responsibilities to make sure that this ill is at least mitigated, if not removed?

Mr. Foot: Several months ago we set up a reference to the Advisory, Conciliation and Arbitration Service, and it has produced a very intelligent report on the subject. Some of its recommendations have already been put into operation. Others of its recommendations are being considered by the management of Her Majesty's Stationery Office. I believe that that is the intelligent way to proceed—to try to get a settlement which is agreed by the people who are responsible for the management and those who do the work.

DEVOLUTION

Mr. Canavan: asked the Lord President of the Council whether he is satisfied with the progress of the Government's devolution plans.

Mr. Foot: Yes, Sir.

Mr. Canavan: Is my right hon. Friend aware that up to 35,000 students in Scotland and Wales may be on the electoral register in a university or college constituency as well as in their home constituencies and, therefore, will have to break the law by voting twice if they want to make a "Yes" vote count in the referendum? Will the Government set up a special register of people with dual registration to try to overcome this problem, which has arisen because of the silly 40 per cent. amendment accepted by this House?

Mr. Foot: I appreciate fully my hon. Friend's feelings on the matter, but I fear that we cannot solve the dilemma in the way that he suggests. We debated this matter in the House a week or two ago.

Mr. Gordon Wilson: Will the Lord President say when the elections to the Scottish and Welsh Assemblies are to be held since, in his view, progress is being made towards them?

Mr. Foot: We must win the referendums first and fix the date afterwards.

REFERENDUMS

Mr. Joan Evans: asked the Lord President of the Council what discussions he has had with the British Broadcasting Corporation and the Independent Broadcasting Authority to ensure fair coverage of the Assembly referendum campaigns in Wales and Scotland.

Mr. William Price: None, Sir.

Mr. Evans: Will my hon. Friend ensure that in the referendum campaign there will be access to the media by the spectrum of political views of those arguing for the Assemblies and those arguing against them, so that the full facts about the Assemblies are put to the people of Wales and Scotland? Will he ensure that the authorities do that?

Mr. Price: I do not think that I need to ensure that the authorities do that. I believe that they will provide fair coverage, and that is the Government's wish.

Mr. Gwynfor Evans: Would it not be fairest to divide the time between the umbrella movements on both sides to ensure that the Labour opponents in Wales have a fair share of the time with their Tory allies?

Mr. Price: That matter goes wider than the Question, which is about the broadcasting authorities and not the media in general. I believe that the broadcasting authorities will do their job correctly.

OIL SUPPLIES AND PRICES

3.30 p.m.

Mr. Peter Viggers: I beg to move,
That this House recognises the need for stability in oil supplies and prices; welcomes the massive opportunities which have been offered by the discovery of oil reserves offshore and onshore the United Kingdom and their successful development so far which has been primarily by private enterprise; believes that nationalisation would be counter-productive when applied to areas of such high commercial risk; and therefore calls upon Her Majesty's Government: (a) to provide an economic climate in which private enterprise can continue to make its contribution to oilfield development, (b) to end the uncertainty which has been caused by the Secretary of State for Energy's approval of a motion at the Labour Party Conference calling for further nationalisation of North Sea oil, and (c) to clarify their intentions with regard to British Petroleum in the light of the Secretary of State for Energy's remarks on that company made at the Labour Party conference.
I see with some surprise that the Minister of State, Department of Energy is sitting on the Government Front Bench. My motion is severely critical of Government policy and names the Secretary of State for Energy. It is surprising that comments made by the Secretary of State at the Labour Party conference are to be explained by his deputy and not by himself. On Thursday evening I gave notice to the Secretary of State of the exact wording of my motion. That doubles my surprise that he is not here today.
There are several reasons why I choose this subject as being appropriate for today's debate.

Mr. Bob Cryer: On a point of order, Mr. Speaker. So far the hon. Member for Gosport (Mr. Viggers) has not declared what I understand to be his interests in oil. I know that the rule is that if an hon. Member has declared his interest at some dim and distant point in the past that is deemed to be enough.
I am sure that you, Mr. Speaker, and the hon. Member will wish members of the public who read the debate to have the fullest and immediate understanding. Surely it would be for the convenience of people outside the House and hon. Members who refer back to the debate if all financial interests relating to the subject under discussion were declared in each debate. That would mean that those who do not have copies of Hansard for several

years past immediately available can draw their own conclusions from the simple record of the debate.

Mr. Viggers rose—

Mr. Speaker: Further to the point of order—Mr. Viggers.

Mr. Viggers: I have no wish to make any comment further to that point of order, Mr. Speaker.

Mr.. Speaker: It is up to hon. Members what interests they declare.

Mr. Viggers: I am grateful to you, Mr. Speaker. I propose to make my own speech in my own way. I shall not be thrown off course by any hon. Member who seeks to try to interfere in the manner in which I present my case.
The first reason why I choose this subject is the sheer size of the amount of money involved and its importance to the national economy. North Sea oil landed in the United Kingdom in 1977 had a value of about £2,000 million. Gas contributed a further £2,000 million. By the mid-1980s the tax yield from North Sea oil alone will be worth £4,000 million a year to the British economy. The amounts involved are so large that most people cannot comprehend them. Professor Northcote Parkinson's laws operate, and the rule in this case is that of high finance, or the point of vanishing interest.
Parkinson shows that a committee will resolve to spend £10 million in two and a half minutes but will spend much more time arguing whether to spend £350 on a bicycle shed, simply because people can comprehend £350 whereas most people find £10 million difficult to visualise.
The amounts involved in North Sea oil run into thousands of millions of pounds, but it has not been the subject of a debate in the Chamber during the four and a half years that I have been a Member of Parliament. The only reference to the subject in general terms was made during a Friday debate on a Private Member's motion tabled by my hon. Friend the Member for Worcestershire, South (Mr. Spicer).
The second reason why we should now debate the subject is that the Government have been in power long enough for their policies to begin to have some effect. Oilfield development involves a


long time scale. It takes about 10 years from the time of oilfield discovery to the time when there is a flow of production from the field. The present Government have been in power for only about five years, but it is possible to see some effects of their policies on offshore oil development.
The third reason is that this is a subject in which I have always had a particular interest. The proper development of North Sea oil was the subject of my maiden speech in the House. I record that I have for many years been involved in the financing of North Sea oil development. That was before I became a Member. I retain some interest.
The hon. Member for Keighley (Mr. Cryer) feels that that is some kind of slur to throw at an hon. Member. But we need some hon. Members with a knowledge of the subject to contribute to the debate. To seek to deprecate and diminish an hon. Member simply because he has some background knowledge is unworthy of the House.
The final reason is that the proper development of North Sea oil is a subject that needs detailed debate. It is not suitable for raising at Question Time, or in response to statements, because the Secretary of State and other Ministers have become adept at side-stepping the main issue. They always invoke the national interest. There is a ritual invocation of the national interest.
When one examines the national interest as interpreted by the Government, one finds that it just means boring, old-fashioned nationalisation. It means nationalisation as it is practised with such notable lack of success in the aircraft and shipbuilding industries and British Leyland. Nationalisation is not the answer. A State-controlled agency is uniquely unsuited to grapple with the major commercial problems of North Sea oil development.
I shall first state my general views of the way in which we should approach oilfield development. First, we should recognise that oil and gas are minerals. They are part of the land mass of the United Kingdom. By using them, we are taking away part of the United Kingdom itself and burning it. It is not unfair to say that we are doing something that is com-

parable to carting away truckloads of arable land and dumping it in the sea. We should, therefore, regard oil and gas reserves as a depletion of capital. It is wrong to think of the benefit as if it were revenue. We should balance the depletion of capital by a reinvestment in alternative energy sources and in other capital projects through the State oil fund.
Secondly, we should regard the oil and gas benefits, which took millions of years to develop, as if they were intended for all generations rather than one. It is wrong for us to act as one generation of society and to think that we can squander the benefits of North Sea oil without proper regard for future generations.
Thirdly, the Government's duty is to provide a stable background for the enormous commercial ventures that are needed to develop oil and gas. The fact that oil companies have been prepared to commit funds in the past does not mean that their investment can be taken for granted in the future.
Fourthly, we should stress conservation of oil and gas in our planning. We must cut out the wasteful flaring of gas as far as possible by bringing forward projects such as the secondary gas-gathering pipelines. We must spread the availability of oil and gas over many years and avoid peaks and troughs of supply. In doing that, we need to utilise all the skills available in the international oil industry for the benefit of the British people as a whole.
With that background, what has been the Government's record? They have two main legislative planks. The first is the petroleum revenue tax. A tax of that nature is similar to the proposal which, no doubt, a Conservative Government would have introduced in 1974 had they had the opportunity. The second plank of Government policy is the creation of the British National Oil Corporation. BNOC's birth, which I remember well, was accompanied by protestations that it would operate commercially. In reality, BNOC is privileged and hampered. Its relationship with the Department of Energy is unclear and unhealthy.
BNOC is the Government's chosen vehicle for North Sea oil nationalisation, and to achieve this purpose it operates as an oil company but also has many other roles linked with Government policy.
BNOC's overt operations allow it to operate as an oil company and it receives licences and does indeed operate as an oil company. Until 1975, 94 per cent. of the money needed for North Sea oil development came from private enterprise and there was no shortage of funds.
How commercial can BNOC be in its present operations? First, it has the right to apply for licences at any time, or the right to receive a suggestion that it should apply for licences at any time. Secondly, it acts as adviser to the Minister. That means that it is the referee in the game as well as a player. Thirdly, it is exempt from petroleum revenue tax, which the Government intend to increase for other companies. Fourthly, it has access to funds through the national oil account. Fifthly, it has access to the Treasury through one nominated director and has access to the Department of Energy through another nominated director. Sixthly, it has the right to take up to 51 per cent. of oil from existing discoveries if it chooses.
This means that BNOC will be trading in 1 million barrels of oil a day by the early 1980s, representing an annual turnover, at current prices, of more than £2,000 million a year. It takes many years to build up a good commercial team in an oil company, yet all these risks are being taken by a company that did not exist three years ago. The link between BNOC and the State is unhealthy, because BNOC has been given too many roles. We cannot expect BNOC to be an impartial observer and adviser and a fully commercial company at the same time. Something has to give, and it has done.
No one in the oil industry now believes that BNOC is impartial. The Government links are too cosy. One oil man, with more bitterness than wit, said recently that the Secretary of State is turning Britain into a banana republic.
BNOC's commerciality is difficult to assess because it has not yet been set up on commercial criteria and the House has had difficulty in gaining detailed access to BNOC, as the Public Accounts Committee and the Select Committee on Nationalised Industries have said. To give one example, I would mention the planning agreements between BNOC and the oil companies. One oil company told me that originally it took a six-page document to

encapsulate the agreement but that it now takes a 220-page document to do the same thing. How can BNOC be commercial when it has so many roles to fulfil, some of which are not intended to be commercial?
It is the general climate in North Sea oil development that has been getting worse, not the weather. Costs are increasing fast. We are looking at oil wells that can cost £10 million each. An authoritative summary of prospects has been prepared by the United Kingdom Offshore Operators Association, UKOOA. We on the Conservative Benches are accustomed to receiving jibes from the Government side that we accept what the oil industry states as gospel. I do not seek to establish this document as authoritative, but unless it is answered by the Minister arid the Government are prepared to show facts that contradict it, one must accept it as authoritative and worthy of reference. Energy Commission Paper No. 17 spells out some facts which should be accepted or refuted.
First, the UKOOA. document says that we need new discoveries to provide production of 2 million barrels a day. Secondly, it points out that one well in five has found oil so far and that one well in 14 has had a commercial discovery so far. The critical question is what is a commercial discovery? If the financial and tax climate is right, quite small fields can be developed. If the climate is unfavourable, only big and heavily productive fields can be undertaken. This is the meaning of the "threshold field size ". The larger the threshold field size, the fewer the oil fields that are likely to be developed. Oil companies assess the cost and the potential advantage and then decide whether to take the risk of speculative drilling.
The threshold field size has been rising and now threatens North Sea oil development. What has the oil company assessment been of North Sea oil development recently? How likely are we to get our 2 million barrels a day of extra production?
Let us examine exploration rig activity. I refer to the questions stimulated by my hon. Friend the Member for Ross and Cromarty (Mr. Gray), to which replies were recently given by the Government. Figures for June to August in the past three years show that 17 exploration


wells were started in 1976, 22 in 1977 and three in 1978. The full-year figures are 58 in 1976, 67 in 1977 and 39—estimated —for this year. When my hon. Friend the Member for Bridgwater (Mr. King) stated in the summer that North Sea oil development was slowing down, the Minister did three things in quick succession. First, he categorically denied it. Secondly, he explained it away. Thirdly, he set up an inquiry to find out why it was happening.
It is too early to be dogmatic but it seems that the sixth round of oil licence applications was not a success. The world's largest oil company, Exxon, was not represented. Many of the major companies have apparently put in nominal applications. The undertaking work programmes will be the acid test whether the sixth round has been successful. It is too early yet to say. I invite the Minister, as is done in Holland and the United States, to state which companies have applied for which blocks, so that we can see what applications have been made and judge for ourselves whether, as we suspect, the pace of North Sea applications is slowing down.
Ministers say that they have done no harm to North Sea oil development so far, but they underestimate the time scale of decisions. Politicians often do. They are like men driving a car travelling at a fast speed. They put their foot on the brake, and when nothing much happens they put their feet down harder and harder on the brake until eventually the vehicle comes to a screaming, shuddering halt. There is a risk that that will happen in the case of North Sea oil.
I would like to tell the Minister of State where I think the Government have gone wrong. There is alarm over the drop in work on new wells. It was the heading to an article in Offshore Oil dated 23rd November, in which the Minister of State is quoted as saying what he thinks could happen. He knows and will not deny that the increase in petroleum revenue tax and in costs in the North Sea have threatened the development of marginal oilfields. The article says that
 On the vexed question of the marginal fields, Dr. Mabon has challenged the companies to approach the Government for tax relief, and

referred back to existing legislation permitting of relaxation of royalty payments for marginals. ' Test our bona fides on tax relief' says Dr. Mabon.
Fair enough, but I think that is looking at the problem through the wrong end of a telescope. The Government are taxing the commercial oil companies out of existence, so that they cannot afford to operate in the North Sea, and then offering them concessions on marginal fields. They ought to be doing the opposite. They should do what the Conservative Government would have done in 1974; they should introduce a clear rate of tax and then bring in an excess level of tax where fields have been excessively or highly profitable.
It is wrong for the Government to use overkill on private enterprise and then give relief. They should deal with it the other way by providing a proper, commercial environment and taxing where appropriate. When the private oil companies' demand to participate in North Sea development drops away, the Government will do what they did in the City of London two years ago, which led to an investment strike, and then say that the country has been let down by private enterprise. The truth is that the climate created by the Government is so unattractive that private enterprise has no alternative but to think twice about investing.

The Minister of State, Department of Energy (Dr. J. Dickson Mabon): The hon. Member said that he was in favour of the petroleum revenue tax, which was introduced in 1975, because the Conservatives would have introduced it if they had won in 1974. If so, is he against the proposals made on 7th August under the PRT? That is not the impression that one gains from his Front Bench.

Mr. Viggers: The right hon. Gentleman knows that an individual Opposition Member is in no position to say whether a second level of taxation is right or not, because he has no access to Treasury or departmental civil servants and advice. While I admire the right hon. Gentleman for attempting, with his customary charm, to tie my shoelaces together, I must seek to avoid that.
I trust that the Conservative Party in Government will provide a tax regime that is attractive to private enterprise but


does not prevent development of the marginal fields and then operate on the more attractive and successful fields rather than use a policy of overkill and then give reliefs on marginal oil.
The first part of my motion is general in its application. It deplores the increase in nationalisation and calls for more stimulus for private enterprise. The second and third parts are specific. They derive from comments by the Secretary of State for Energy at the Labour Party conference this year. How the Minister will seek to exculpate, explain or correct his right hon. Friend, only time will tell, but clarification is needed of the right hon. Gentleman's mischievous remarks when replying to that debate.
For the benefit of those who were fortunate enough not to be at the Labour Party conference, I had better explain that a resolution was passed to take oil resources into public ownership. The Secretary of State accepted that resolution on behalf of the national executive committee of the Labour Party.

Mr. Sydney Bidwell: Hear, hear.

Mr. Viggers: The hon. Member expresses agreement, but what does the resolution mean? The Conservative Government nationalised North Sea oil in 1964, and oil resources have been nationalised. How can they be renationalised, or further nationalised? In one sense, therefore, the resolution was silly, as The Times commented in a leading article on 6th October 1978, saying that
Labour Party conferences have a capacity to do plain silly things…Yesterday's passing of a motion calling for the taking of North Sea oil into public ownership falls squarely into this category.
So to that extent it was silly, but we cannot merely dismiss it, particularly when the responsible Minister welcomes the resolution and gives further thought to the issue.
The Secretary of State said, according to The Times of that same day:
 In time, the oil companies will have to be moved from being concessionaires to being con- tractors, so that ownership of the resources is in the hands of the nations themselves.
I used the word "mischievous" advisedly. The Secretary of State used the word "nations" in the plural. Which nations is he thinking of? Is that a hint of sep-

arate funds for parts of the United Kingdom? If so, it is a complete departure, and implies a change of policy by the Government.
One cannot feel that the Secretary of State says anything in vain. He usually means something, however obscure and Delphic his utterances appear. Let us consider the effect of this comment on the oil companies, on their confidence in longterm contractual arrangements and on their uncertainty in respect of the compensation that they may be given should their interests be nationalised. Let us also think of the effect on the taxpayer who would have to foot the bill if the oil companies were nationalised. Have the Government any further intention to renationalise North Sea oil, and, if so, how? What would it cost? Whether the Minister can interpret the remarks of his absent right hon. Friend, only time will tell.
According to The Times,
 The passage of yesterday's motion by itself must have created some element of that uncertainty about the future.
It is mischievous for the Secretary of State to behave in this way and not to explain himself. It is surprising, if not also mischievous, that he is not here to explain himself today.
My third point is a request for some clarification of the Government's intentions with regard to British Petroleum, Britain's biggest company, which is 51 per cent. State-owned and which operates wholly commercially, with great success world-wide. So far, successive Governments have been restrained in their attitude towards the company and have been rewarded by an excellent capital growth and income. Before the Minister points it out to me, let me say that I know that the Conservative Government arranged for the taking of that stake in BP.
The success of BP does not please the Secretary of State, who has described the Government's relationship with the company as "not a satisfactory one ". He said, again at the Labour Party conference, that a resolution to bring BP and its subsidiaries under full public control, along with another motion, represented
 an important addition to Labour's armoury of policies.
What is the right hon. Gentleman planning? What would happen if he tightened


State control? First, he would damage the commercial spirit of BP. Secondly, he would damage BP's international operations. For example, BP developed the North Slope oilfield in Alaska, involving enormous commercial risks, which a Government agency would have found it difficult to justify to its sponsoring Department. Some of the greatest obstacles facing the oil company were environmental objections to the pipeline. A State-controlled company would have been hampered by its national connections and halted by political pressure if it had tried to push through such a project.
It is arguable that Labour Party conference resolutions are one thing and Government policies another, but in this case the Minister responsible for an important Government Department has approved the conference resolutions and made it clear where he stands. That is why my motion calls on the Government to say where they stand.
When the Secretary of Staate was moved from the Department of Industry, the Prime Minister was congratulated on the skill of the appointment. According to The Times' political correspondent, Ronald Butt, the move took place because the Prime Minister had come to believe that the Secretary of State was
 a major obstacle to the return of confidence to industry.
The Department of Energy is not a siding into which to shunt a Minister who is damaging elsewhere; it is a major Department of State, responsible for decisions that will affect this country for decades. That is why the Government must recognise the problems that their own policies have created and, in particular, must clarify and perhaps correct the mischievous remarks of the Secretary of State.

3.58 p.m.

Mr. J. Grimond: I congratulate the hon. Member for Gosport (Mr. Viggers) on giving us this opportunity to discuss North Sea oil. His motion raises many important points.
North Sea oil development is now reaching a crucial point. In Orkney, it is several years since oil began flowing to Flotta. On the whole, the operation has been handled to the satisfaction of

the oil company, the local authority and the Government. There have been snags, of course, and we should learn the lessons which have emerged.
Once again, as I often do, I urge the Government to look more closely at what is happening in Orkney and Shetland, because there they can see under semi-laboratory conditions what may happen on a wider scale in the United Kingdom. The main point is that the oil terminal is on a separate island in a confined area and it is possible to some extent to control such matters as labour and transport.
Further north of Sullom, the position is very different. Many people think that oil has been pouring into Shetland for years. The first oil arrived in Shetland about a fortnight ago, and the whole operation is many years behind time. It has run into a number of snags, one of which, already mentioned by the hon. Member for Gosport, is the escalating cost of exploration and of bringing oil ashore.
The operation on Shetland is much bigger than that on Orkney. It is on the mainland of Shetland, and a number of difficult problems have arisen. One concerns the Government's pay policy. The oil companies pay immensely high rates of wages and salaries, but the pilots, harmour-masters and so on who man the terminal are prevented from keeping up with these high rates because they must conform with the Government's pay policy. That presents a difficulty.
There have been difficulties at the terminal not only in respect of people's pay but also in respect of island allowances. I beg the Government, therefore, to look at this whole position. I hope that we have got over the worst of it, but it is still liable to cause trouble at a very important terminal.
The running of the terminal is a joint operation between the oil companies and the local authority. It has taken a long time to iron out the various snags. Now the oil is flowing, and I beg the Government, now at least, not to interfere with the arrangements that have been made. The Government may feel that other arrangements might have been better. So may I. Nevertheless, the matter has been decided, the terminal has been built and the oil is now coming ashore.
A certain amount of concern has been caused by talk of further nationalisation. But what would be nationalised? The oil in the oilfields has long been nationalised. There are the British National Oil Corporation and the semi-nationalised British Petroleum. Therefore, the only other items that could be nationalised are either other oil companies or terminals. I trust that we may have a reassurance that that is not the Government's intention.
Many people regard oil as the salvation of the British economy. I do not. If access to raw materials was the making of a country, Russia would be the richest country and Switzerland the poorest. The situation is almost exactly the reverse. Many people feel that we can look to the oil to solve all our difficulties. However, oil—certainly locally—is extremely inflationary. It has boosted every form of payment, price, salary and wage, but those who do not enjoy the advantages of working in the oil industry still have to pay the higher prices.
This factor has put the local authorities in great difficulties. Immense sums have had to be laid out before any oil revenue has appeared. The authorities are already in serious difficulties over their rates, and they are seeking Government assistance in this matter. I hope that they will get a satisfactory answer. Nationally, though the oil may help the balance of payments, it is by no means certain yet that its net effect in the long run may not be inflationary. It will only not be so if there is a great improvement in productivity, and oil will not by itself achieve that.
The hon. Member for Gosport also mentioned investment. He is right that we should be investing in alternative forms of energy. However, the Government's estimate is that these other forms of renewable energy will only at best provide about one-eighth or one-tenth of our energy requirements, assuming that all the experiments succeed. I hope that the Minister of State will say something about that. It is most important to look ahead to the time when the oil runs out.
In the North of Scotland there is very little spin-off from oil. As far as I know, practically no subsidiary industries connected with oil have sprung up. It is, therefore, a question not only of investing

to produce energy after the oil is exhausted' but of giving work to the people who are now employed in oil construction or other oil-related work. That will be a most serious matter for my constituency.
The population of Shetland has risen from 18,000 to 21,000 in the last few years. There are 4,000 labourers in camps. They will return home, though what they will find to do when they get there is anyone's guess. At any rate, people who come to live in Shetland will have to be supplied with work, and our native industries will have to be built up again.
I hope that the Government will say something about the flaring of gas. I have pressed repeatedly for better use to be made of the gas which at present is still being flared off at Flotta. I do not know how much of the gas at Sullom can be used for the power station, which will be very large and in the long run will be able to meet all of Shetland's demands.
I come to the question of pollution. The Government's attention seems to be fixed too closely on pollution on the high seas. However, pollution in narrow waters would be devastating. If there was pollution on the approaches to Sullom, none of the figures that the Government have quoted concerning their capacity to clear up sea pollution would make any sense. If Yell Sound was filled with oil, that would be an appalling disaster, and it would be only marginally less bad if the disaster took place in the Pentland Firth.
I see the hon. Member for Ross and Cromarty (Mr. Gray) here. He may well find that some large tanker on its way to Scapa Flow could cover the beaches of his constituency and many others with oil before the Government's rescue operation got under way. I am told that the great depot of materials for clearing up oil pollution is to be at Bristol. Bristol, I think, is not one of the major oil terminals of the British Isles. I should like something to be put nearer to Scapa and Sullom.
There is ambiguity about the control of oil. My fear is not only that BNOC is being put into an impossible position. I agree with the hon. Member for Gosport that it is extremely difficult for it to be a Government adviser and a major contractor competing with other companies. That seems to be true also, to some


extent, of local authorities and even the Government, and I hope that the Minister of State will clarify who is the referee in all these matters. It is not enough for the referee to expose his commercial interests. It is essential for him not to have any. I trust that the Government will say something about that.
I hope that the Minister will say something, too, about exploration. I tend to get rather confused about whether exploration has gone well or badly and about how much more exploration we want. The hon. Member for Gosport said that it was important to conserve oil. It might therefore be a good thing for there to be no exploration. I am not certain what is the ideal.
Will the Government say what is happening in the Norwegian sector of the North Sea? Is any oil reaching Norway? What will Norwegians do with it? Will they bring it across to this country? How is their exploration going?
In spite of a short-fall from the North Sea, there is no shortage of oil at current prices.
The history of North Sea oil is at an important stage. There is genuine concern about the future. There is considerable alarm at the escalation of costs, and I believe that it would be fatal to begin altering the basis upon which all calculations have been made. I hope that the Government will give us a firm assurance that that is not their intention and that further nationalisation will not be carried out. I trust that they will be able to reassure us on some of the other points that I have raised.

4.10 p.m.

Mr. Eric S. Heller: The hon. Member for Gosport (Mr. Viggers), in moving the motion, spent much of his time discussing not issues but my right hon. Friend the Secretary of State for Energy. I am not surprised that that was his line. It also seems to be the line taken by a great number of our political commentators, who spend most of their time trying to build up my right hon. Friend as the great bogyman of the Labour Party. Even when my right hon. Friend takes a step to the extreme Right, we see it interpreted as being on the extreme Left. That is all part of the present game.
In replying to the debate at the Labour Party conference, my right hon. Friend was not speaking as Secretary of State for Energy, nor was he speaking of Government policies ; he was dealing with the policy accepted by the national executive committee of the Labour Party. That was his job. Those of us who speak on behalf of the NEC at Labour Party conferences are not giving our personal views, whatever they may be; we are undertaking the job of replying to a debate on a motion. We are putting forward the interpretation of the NEC. At the conference, the NEC agreed to support the motion put forward by the Amalgamated Union of Engineering Workers—a motion moved ably to Mr. Gavin Laird on behalf of that union.
I wish to put these matters on record, because it appears that whenever my right hon. Friend speaks on any issue—and even if he does not speak—his speech is built up on the lines of "Benn clashes with Prime Minister ", with the suggestion that my right hon. Friend wishes to take everything into public ownership and to bring about a Soviet-controlled State, and all the rest of it. That is absolute nonsense.

Mr. Hamish Gray: It is not nonsense.

Mr. Heifer: If the hon. Gentleman does not regard it as nonsense, he obviously has not got much on top to know whether it is nonsense. Anybody who has any intelligence knows that that is absolute nonsense if alleged against my right hon. Friend the Secretary of State for Energy.
I wish to emphasise that my right hon. Friend was speaking for the Labour Party national executive; he was not defining the position of the Government. We all know that the Government are elected on a manifesto for five years. The point of a Labour Party conference resolution is to define what we wish to do for the next five or 10 years. Mr. Gavin Laird, in moving his union's motion, said:
 We demand complete public ownership of the oil resources.
What is wrong with that?

Mr. Gray: A great deal.

Mr. Heifer: One has only to mention "nationalisation" or "public ownership" for Opposition Members to go into a quiver, just like a jelly. What is wrong


with asking that the resources of this country—resources that are not owned by any private enterprise group—should be brought within public control in the interests of the nation as a whole? I see nothing wrong with it. The Conservative Party sees everything wrong with it because it puts profits and private enterprise before the interests of the nation.

Mr. Gray: And jobs.

Mr. Hefter: If the hon. Gentleman wishes to discuss the subject of jobs, he should remember that under private enterprise Rolls-Royce got into such trouble that a Conservative Government had to bring that firm under public ownership to protect jobs.

Mr. Nigel Forman: Does the hon. Gentleman realise—if he ever pays any attention to events beyond Smith Square and the national executive of the Labour Party—that the overwhelming majority of public opinion, whenever it is told of anything to do with further nationalisation, is strongly opposed to such a course? That applies to the North Sea as to anything else. Secondly, does he appreciate that the main difference between my hon. Friend the Member for Ross and Cromarty (Mr. Gray) and himself is that he himself has got plenty on top, but nothing between the ears.

Mr. Heller: We are always hearing that people are opposed to public ownership or nationalisation as reflected by public opinion polls. We have heard that since the year dot.

Mr. Forman: It is true.

Mr. Hefter: If it is true, why does Labour still pull a considerable vote, and why will it continue to do so? It does so because it puts forward the interests of the nation and of ordinary working people rather than the interests of profit and private enterprise.

Mr. Gray: Which section of Labour —yours or the Right wing?

Mr. Speaker: Order. I do not have one.

Mr. Heifer: The hon. Member for Ross and Cromarty (Mr. Gray) reacts exactly as one expects. One has only to mention bringing the nation's resources under public control in the interests of the

nation rather than in the interests of private enterprise for Tory Members to go off like a bomb. They put squibs here, there and everywhere. Why do they do it? They take that course because they do not give a damn about ordinary people. They think in terms only of the profit-making system, not of the interests of the mass of ordinary people.

Mr. Tom King: What does the motion passed at the Labour Party conference mean? The motion said:
 The Conference calls for the Government to take into public ownership North Sea oil".
When the hon. Member for Liverpool, Walton (Mr. Helfer) was a Minister in the Labour Government, they published a White Paper which said that Britain's oil was already publicly owned. The White Paper added that public ownership had been achieved under a Conservative Government. Does not that make the hon. Gentleman's last remark seem a little silly?

Mr. Helfer: The hon. Gentleman can find out exactly what the motion means by reading what was said by the speakers in the debate and by my right hon. Friend the Secretary of State for Energy, who was speaking on behalf of the NEC. My right hon. Friend said that the Government should become the contractors rather than the concessionaires and that the Labour Party intended to extend the whole concept of complete public ownership of the oil industry.
There are some of us in this House who, from the beginning, argued that the oil resources of our nation should be entirely publicly owned and controlled, and that the contractors should also have been the Government, on behalf of the British people, rather than private enterprise. We have argued that line consistently. We believe that the oil was put there by the gift of God and not by the Conservative Party or private enterprise. The same is true of coal and all the other resources, such as water. Private enterprise had nothing whatever to do with the origin of those resources. They are the gift of God and not the gift of political parties. Therefore, they should be utilised by the nation, on behalf of the nation, and in the nation's interests, and not because private enterprise


wants to utilise those resources for its own profit and interests.

Mr. Tom King: That was why the Conservative Government passed the Continental Shelf Act in 1964. It wanted to bring oil into the nation's ownership. I am grateful to the hon. Gentleman for clarifying the meaning of the Labour Party motion. Will he go a little further? Is it intended that that motion will remove retrospectively from the present oil companies the licences that they now hold? Furthermore, will he comment on the reason why the Labour Government are now issuing a further licence round? Is it his intention that a future Labour Government should remove retrospectively the rights achieved under those licences?

Mr. Heller: The hon. Gentleman knows better than to put a question like that to me. That is a matter for the next Labour Government to determine. Moreover, the hon. Gentleman knows that whatever the Government are doing now in relation to the present, licensing will continue. We are bound by the manifesto commitments upon which we were elected. This matter is not yet in Labour's manifesto, and the hon. Gentleman knows quite well how we will do it. The process of working out new legislation is that when one comes into Government one discusses a question with advisers and with civil servants and works out how such legislation will be put into operation and what form it will take.
The hon. Gentleman must not think that I was born yesterday. I did not come down from Mars. I entered the House 15 years ago, and I have had a lot of experience of the way in which legislation comes before this House. He knows that as well as I do. He also knows how these things work in relation to a resolution of a Labour Party conference—or a Tory Party conference, for that matter. Tory Party conferences have passed resolutions on one thing or another which never see the light of day, or, if they do, appear not in exactly the terms passed at the conference. That is a catch question on which I am not prepared to be caught.
The reality is that this is an expression of opinion by the Labour Party. which will want something of that kind in the party manifesto. The actual details will

be worked out by an incoming Labour Government. The hon. Gentleman knows that very well.

Mr. Tom King: So we now have this quite clear. I understand why these matters have to be discussed and the details of how we can do so. But do I understand the hon. Gentleman to be saying that, in his view, it will be a matter for discussion with civil servants, if a Labour Government were returned at the next election, as to how the existing licences would be re-possessed by that Government? That is one of the matters which would be discussed.

Mr. Heller: It seems that we agree on something—that is, the actual process of legislation being carried through.
I come now to another point made by the hon. Member for Gosport. He spoke of the nation's resources as though my right hon. Friend the Secretary of State for Energy was talking about some sort of special position for Wales or Scotland—about the nation in the sense of the four nations which make up the United Kingdom. It is clear from the speech of the Secretary of State for Energy that he was talking about the British nation as a whole, not its constituent parts. He was talking of the whole, including the English, the Scots, the Welsh and the Irish. If one reads the speech one sees that the point is further clarified. The Secretary of State spoke of the EEC, because, he said—I quote from the report in The Times of 6th November this year —there were
 a number of challenges from the EEC to Britain's energy policy. With the help of the unions the Government had succeeded in fighting off a serious attempt to give the EEC Commission effective control of Britain's refinery policy and to determine the throughput, although the oil was British and Britain was overwhelmingly the greatest oil producer in the Community.
It is clear from that reference alone that my right hon. Friend was talking about the British nation as a whole and not the component parts.
On the other hand, the resolution suggested that a fund should be administered by the National Enterprise Board to ensure the regeneration of the United Kingdom manufacturing industry. That is absolutely essential. One of the problems we have to face—this should be recognised:specially by the Opposition—is


that our oil resources are not gigantic ; they are fairly transient and will not last for ever. But the Opposition would use them, if they ever got control, to bring down taxation and make certain that people received more in their pay packets, instead of concerning themselves precisely with the regeneration of British industry, which would create more jobs and ensure that we achieve a turnround from the difficult situation we have had for so long.
I see some shaking of heads. I hope that there will be an authoritative statement from the Tory Opposition that they have no intention whatsoever of using the oil resources in that way. We have not as yet heard such an authoritative statement. In relation to our oil resources, we on the Labour Benches have long argued for the regeneration of British industry. It is essential that we use this opportunity to make certain that areas of high unemployment, such as those in Scotland, Wales, Northern Ireland, the North-West and the North-East, are relieved through the creation of new jobs, the oil resources being used in that way. That is what we have been talking about.
The hon. Member for Gosport said that we were being silly in this matter. He alleged that we said silly things. I do not know what he means by that. If the hon. Gentleman had watched the debate on television he would have witnessed a first-class discussion on the need to get to grips with the problem of our oil resources. He would have heard the demand that the fullest possible use of those resources should be made for the nation as a whole.
Obviously, the Government cannot, and should not, say that they will implement the Labour Party resolution carried at conference. That is not their remit. Nevertheless, I hope that that conference resolution, suitably brought within the framework of legislation in the House, will be properly used so that we may extend public ownership in the oil industry and use the resources of the nation in that industry, and in others as well, in the interests of the whole country.

4.27 p.m.

Mr. Nigel Forman: I am delighted to pay my tribute to my hon. Friend the Member for Gosport (Mr. Viggers) for the excellent way in which

he introduced this interesting debate. I echo what he said about what a shame it is that the House does not have more opportunities in Government time to discuss these important issues. I also regret very much, as I am sure my hon. Friends do, the absence of the Secretary of State for Energy from the Front Bench, delighted though we are to see his right hon. Friend the Minister of State there. It is always nice to see him in his place, though I suspect that the reason why the Secretary of State is absent is that, as always, he has other fish to fry in Smith Square and Transport House. We know that he seems to give higher priority to those activities than he does to satisfying the House in its legitimate task of cross-examining and investigating Government policy.

Dr. J. Dickson Mabon: Perhaps I should have explained the Secretary of State's absence at the beginning. His first obligation, of course, is to the House of Commons, but he is engaged on business involving Cabinet committees, which I cannot mention but which are very much involved with the subject of this debate.

Mr. Forman: I am somewhat reassured to hear that, but I still feel that the point stands concerning those matters in which the Secretary of State is most closely interested. The important point made by my hon. Friend was that any Government of this country have to establish a relationship of equity and stability between themselves and the oil companies. I therefore feel that the time has come, at the end of 1978, for a further set of Government reassurances that carry credibility with all concerned in these operations in the North Sea.
I believe that the recent actions and statements by the Secretary of State, in particular, have gone a long way to destroying that essential credibility. My hon. Friend instanced the example of the Exxon company, which did not apply for the sixth round, and I myself have been made aware recently of considerable unhappiness on the part of many of the oil companies about the uncertainty and the unsatisfactory way in which they have been treated by the Government.
It is worth itemising the factors necessary to create sufficient confidence among the oil companies in order to ensure that


the oil is brought ashore and, equally, that the nation gets its fair share of the profits. The main three factors are the geological potential of the area, the economic cost-benefit calculations, and the political stability that the companies expect to see—or not to see, as the case may be—over the long periods in question.
First, on the geological side, it is obvious to all hon. Members that the North Sea is a very attractive proposition on those criteria, although we are well aware that many dry holes are bored and that there is a wide range of difficult practical problems—perhaps the most difficult that have to be overcome anywhere in the world.
We are well aware that the companies are working in water depths and weather conditions that put them on the frontiers of oil industry experience, but nobody would pretend that geological factors on their own are an insuperable obstacle to our achieving what we want in the North Sea.
When we move to the more contentious area of the economic cost-benefit calculations that are involved, it is fair to say that some large North Sea fields are obviously extremely attractive, in economic terms, for both the companies and the Exchequer. Obviously Forties comes in mind, with its estimated recoverable capacity of 1,800 million barrels.
The Government argued, when they announced their proposed changes in PRT on 2nd August, that the Exchequer was not obtaining a large enough slice of the action. As I pointed out to the Chief Secretary to the Treasury, that was accepted by successive Governments. It was always foreseen that in the early years of commercial exploitation the Government's take would not be as great as might have been expected because of write-offs, allowances and other provisions. However, it is well to remember that in future developments in the North Sea the Exchequer stands to gain more than 70 per cent. of the available profits. By anybody's reckoning, that constitutes a fair return for the nation.
It is right and proper that that should be so, but we should not allow confidence in the rules of the game in the North Sea to be so eroded that the oil

companies no longer want to take part. It is no good so trimming the geese that lay the golden eggs that we end up by killing them. We do not get anywhere by taking that course. That is a practical proposition that those outside the House might understand better than do some of the ideologues below the Gangway on the Labour Benches.
The oil companies concentrate increasingly on only a few promising blocks to the detriment of some of the marginal fields. As the Minister knows, that has implications for the ultimately recoverable totals that will be available to the nation. The stage at which a field becomes so marginal that it is not worth developing will vary greatly, according to the commitments of the companies concerned world-wide and the severity or generosity of Government policy at any one time. Much depends on the presence or absence of confidence in the future treatment by Governments of the oil companies' activities. It is fair to say that the so-called Varley assurances, which lasted for only three years, cannot be said to have maintained the degree of stability and continuity of expectations that is commensurate with the long time scales involved in North Sea activity.
I have been advised that there are some promising new fields in the range of 80 million to 120 million barrels recoverable capacity that have not been developed and that might have been developed but for the reasons that I have been adducing. That is serious. The fields involved are commercially recoverable fields of a size that is definitely not to be sneezed at in the context of our total effort in the North Sea. That means oil temporarily lost to the consumer. It means revenue that is temporarily lost to the Exchequer, which is equally important. On 2nd August the Chief Secretary was talking about PRT changes. He said that the Government estimated that such changes would, when in operation, increase the public take by about £150 million in the financial year 1979–80 and increasingly more thereafter.
The balance that has to be considered by the House is whether the immediate gain in revenue is worth the potential long-term loss to the country because the conditions are such that the quantities


of oil that might have been brought ashore are not recovered. I have already referred to the balance in terms of the general interests of the oil companies and their willingness to stay in the North Sea. That is not to be ignored.
The Chief Secretary said that he thought that the changes would result in the fact that
'' most of the fields in the North Sea will be able to obtain what I have described as a reasonable return."—[[Official Report, 2nd August 1978 ; Vol. 955, c. 759.]
The right hon. Gentleman is, of course, a very honest man. He used the word "most"; he did not say "all". There is legitimate fear that fields will be excluded on commercial terms because of the changes in the conditions applying, and that we will be forgoing oil that would have been available for consumers and, more importantly, revenue that would have been available to the Exchequer in future. That is oil and revenue that we need not forgo.

Dr. J. Dickson Mabon: The hon. Gentleman must remember that there is the royalty refund section that exists in the original Act. That section has never been tested. I am told that if we ran at about 121 per cent. it would mean about 8 per cent. or 9 per cent. in real returns. We are arguing with the companies whether that is a significant factor to put into the equation.

Mr. Forman: If the Minister manages to persuade his right hon. Friend the Secretary of State that it is worth while putting such a saving clause into Government policy, that should be reflected in new assurances. As I have said, we have reached a stage of uncertainty that is not in the nation's interests, and some bankable assurances are now needed to ensure continuity of supply at the levels that we wish to see.
The Government may think that some of the arguments to which I have drawn attention do not matter. They may say—especially those below the Gangway on the Labour Benches—that BNOC is being developed and could recover the oil in due time itself if it were developed as a commercial company. That is to take a rather chauvinistic and short-sighted attitude. BNOC could not possibly do all that is involved on its own. For instance,

we find that well over 90 per cent. of all oil landed in this country until very recently has been through the auspices of experienced and skilled private companies that have been involved in similar operations, world-wide, for many decades. We would be foolish to do anything to cut them out of that activity, which is for the benefit of the nation in the long run.

Mr. Hafer: Does the hon. Gentleman agree that when the Suez canal was about to be nationalised by the Egyptian Government the howl went up in Britain that it could not possibly be taken over by that Government as they did not have the expertise? It was said that the canal would become silted within a very short time. The canal was taken over most effectively by the Egyptian Government. They overcame the problems. The canal still belongs to Egypt. What was done with the Suez canal could be done by any other nation if it were determined to act in its own interests.

Mr. Forman: The hon. Gentleman has picked upon an unfortunate analogy in making his case. He will know that since the Egyption Government took over the Suez canal it has been closed for many years, for reasons not unconnected with events taking place in Egypt. There have been sunken ships lying in the canal. There have been many other difficulties involving, for example, a shortage of suitable pilots.

Mr. Heffer: There have been military reasons.

Mr. Forman: And civilian reasons as well.

Mr. Viggers: My hon. Friend may not know that the Suez canal stayed shut for some time and was cleared eventually by the Royal Navy. Many of the Navy's divers now work for commercial oil companies.

Mr. Forman: The key consideration of the three factors is political stability. As long as any Government in an oil-producing area can be firm and fair with private sector companies, there is a mutual balance of advantage for all concerned. But this means, as has been said, setting out clear ground rules and assurances to govern this area and sticking to them. It means adequate consultation with the interests involved, prior to any


changes that might affect them. It means resolving, in the case of the United Kingdom, the anomaly of BNOC, which is now both poacher and gamekeeper within the North Sea, and which is in a position where the observance of commercial confidentiality is in doubt as between BNOC and the Government, when the former participates with the oil companies in the existing arrangements. It means removing stupid and damaging threats, first, to take BP into full nationalisation, whatever that may mean, and, secondly, the eventual possibility—even worse—of sequestration of oil company assets within United Kingdom jurisdiction.
The vital point to understand about these rather controversial arguments is that none of these steps, if carried out, would do any good to the interests of the British people. But, above all, policy requires the creation of a new climate of good will, confidence and stability, so that oil companies can press ahead with their business and the Government, for their part, can secure their fair slice of the larger cake for the benefit of the nation.
If a course of action such as I have described is not followed, and soon, we shall see a further decline of drilling activity in United Kingdom waters. We shall see the movement of scarce and skilled men and material to Mexico, China or the Baltimore trench, off the eastern coast of the United States, and elsewhere. These are highly mobile and truly international companies, and there are many interests involved.
Finally, if this policy comes about we shall see the collapse of many of our material hopes in this country which have been built far too much on the North Sea when the real faults and answers lie elsewhere. We have now reached the stage in the North Sea development where the Secretary of State and his ilk on the Left of the Labour Movement are a luxury which this country can no longer afford.

Mr. Helfer: What does the hon. Gentleman propose to do—shoot us?

Mr. Forman: We are more civilised than that. As we have seen from press reports of the Secretary of State's work on the national executive committee of the Labour Party and other bodies, this

is a view which seems at least to be shared by the Prime Minister himself. The danger is that in the case of the North Sea, perhaps more than in other areas of policy where the Secretary of State seeks to impose Socialism which is red in tooth and claw against the wishes of the British people, the Labour moderates will once again move too feebly and too late to counter these dangerous tendencies, and a few years later they will have found their way into Government legislation via the Labour manifesto. We must not, in this House or anywhere else, allow the wild men of the Left to smash the prospects of one of the few uncovenanted blessings offered to this country.
To that extent the hon. Member for Liverpool, Walton (Mr. Heffer) was quite right. It was not Socialists or Conservatives who put the oil and gas where it is; it was natural processes over thousands of millions of years. It is private enterprise which has discovered and recovered the great bulk of oil and gas so far. It is the present Secretary of State and his cronies who are in the process of spoiling everything by sacrificing progress on the altar of Socialism.
It will therefore be left to the next Conservative Government to repair the damage by ensuring a reasonable return to the nation and to the oil companies. Indeed, the whole message of the debate this afternoon is that the one cannot be achieved without the other.

4.44 p.m.

Mr. Gordon Wilson: We are all grateful to the hon. Member for Gosport (Mr. Viggers) for having used his opportunity in the Ballot to introduce the question of Government oil policies.
I was rather amused about the debate which developed over the possibilities of the Labour Party adopting the principle of nationalisation in some future manifesto, largely because we had the same amount of heat over the question of participation three or four years ago. At the end of the day, it turned out that participation did not mean very much, at least in regard to those licences which had already been allocated. The formula then adopted of no gain, no loss did not give much return to the State, whether that State was representative of the United


Kingdom or the integral parts of the United Kingdom. Indeed, one of the problems that the Government would have to face if they decided to go ahead with nationalisation in the future would be the amount of compensation which would have to be paid as a result.
One factor which has not been mentioned in the debate to any great degree is the level of price which applies. The fields which are now being exploited are generally the larger ones which were discovered within a certain time scale. They are more profitable to develop. When there is reference to petroleum taxation, it must be primarily in relation to those fields which are now in production or are likely to be in production, and on oil company calculations they are most likely to be those which will give the best return.
With regard to the other fields—some of which have been discovered but not developed and others which have yet to be discovered—other questions arise. Let us consider some of the fields which are likely to be developed soon. There is the Cormorant North field, which was discovered in 1974 and is only now approaching the stage of development. One which was discovered even earlier is the Maureen field, for which a platform is now being designed, incidentally, by an Italian firm, and the contracts are likely to go out shortly. All these marginal or smaller fields are more likely to be developed in the future as and when the world price for oil goes up.
The price of oil has declined over the last few years, and the situation has not been helped by the depreciation in the value of the dollar. That is a factor which affects the incomes of oil companies, since the dollar is the currency in which oil prices are paid. Most experts accept that it is likely that oil prices will increase. There are some arguments developing as to what impact the new fields in Mexico might have or what might occur if other countries start exporting.
But, leaving those arguments aside, the general view of people in the industry and of petroleum economists is that world oil prices are likely to go up in the next 10 or 15 years. This would have an immediate impact upon fields which are not considered to be worth developing

at present. A considerable number of smaller fields fall into that category. If those fields which are not now considered to be profitable were based on land, they would certainly be developed because of the cheaper development costs.
I should like to ask the Minister of State some questions about the policy of the Government. I followed the observations which were made about the sixth round licences, and it remains a matter of interest to find out to what extent that licensing round has been over-subscribed. It would be interesting if the Minister of State were to publish the names of the consortia and the blocks for which applications have been made. So far, the Department of Energy has published only the list of oil companies which have applied for the blocks offered.
I hope that the Minister of State will take note of an observation which has been made to me—it has no direct relevance to the severity or otherwise of licensing rounds—namely, that in each licensing round the conditions fluctuate quite widely. I appreciate that the Government have over a period been learning from the experience of the past and may also have been adapting their licence terms to suit the geological nature of the blocks which are going on offer. However, the time may be fairly near when the Government can perhaps adopt model clauses for exploration rounds, since I am told that there is a degree of criticism over the constant fluctuation in the amount of time taken in the evaluation of licences and the conditions under which these will be given.
What progress has been made on the South-West Approaches? I noticed recently that the Minister wrote off the Celtic Sea, at least in relation to potential oil reserves. Will he indicate what progress has been made on the South-West Approaches? Do the Government intend to hurry ahead with these developments? Alternatively, as I suspect and have said in the past, is the intention to allow Scotland's oil resources to be depleted while retaining the reservoirs in the South-West Approaches for future English use?
In relation to depletion, I refer the Minister of State to the statement that he made in "Good Morning Scotland",


a BBC programme, on Wednesday 18th October, of which somehow I received a transcript. Mr. Robin Wylie asked:
 It's not a case, is it, that too much oil has been extracted too fast and you are having to slow down? 
I know that we would all like the Minister to slow down occasionally. The Minister's answer was:
 In a way it is. In a way we can see ourselves getting to self-sufficiency in 1980 quite fast and also getting into a surplus in the '80s quite fast, and we are not therefore necessarily anxious to open up new fields. Or, if we are going to open up new fields, it will be at a slower pace than before.
I welcome the Minister's conversion, because only six months ago he took me to task on depletion. I know of the pressure which the TUC, for instance, is bringing on him through the Energy Commission to try to adopt a depletion policy which will stand up. The right hon. Gentleman knows, as I do, that, as and when world oil prices go up in the 1990s, the United Kingdom will be importing 50 per cent. of its oil at atrociously high cost. Has there been any change in the Government's depletion policy?
Reference has been made to the important matter of flaring of gas. What is the estimated value of the gas which was consumed in, say, 1977? Will the Minister give the House an idea of the value of the raw material which has been disposed of in that fashion?
Will the Minister tell us something more about downstream activities and refining? I know that in this respect the Department of Industry and the Scottish Office have a role to play. However, the Minister may have seen the headline in The Scotsman on Thursday 7th December:
 Scotland losing out on spin-off from oil.
The expert concerned indicated at a conference that the only development likely to take place was at Moss Morran, in Fife. Since the Department of Energy issued a declaration in the House in relation to the Cromarty refinery and the need for refining in downstream activity, does the right hon. Gentleman consider that report to be true? Or is there still room for development of the Cromarty refinery, in which the hon. Member for Ross and Cromarty (Mr. Gray) has an interest, or of Barry Buddon, in which I have an interest, as have my constituents?
My last point relates to revenues. I do not wish to make too much of this matter as we had a spirited debate on it on 22nd June. I suspect that the Minister, in his secret heart, agrees that it is necessary that the revenues be used for industrial development in Scotland. The hon. Member for Liverpool, Walton (Mr. Hafer) referred to what was said at the Labour Party conference about the National Enterprise Board being given control of the oil revenues for industrial development. No reference seemed to he made to the Scottish Development Agency. I hope that the hon. Member for Walton missed that out inadvertently. Perhaps the Minister, as a member of the Labour Party and being enthusiastic about nationalisation and so on, will tell us whether the SDA will be given recourse to the oil revenues in the same way as the NEB.

4.55 p.m.

Mr. Robert Hughes: There is no doubt that the discovery of oil in the North Sea has been a tremendous bonus to this country and offers tremendous potential. I should have expected all right hon. and hon. Members, in whatever part of the House they may be, to be only too delighted with what is happening in the North Sea and with the oil which is coming ashore and which is potentially available for the future.
Conservative Members, almost from the day that the Labour Party took office, have been looking for something bad. They seem to be looking for a cloud in every silver lining. They have to look for someone to blame for their own obsession with failure. They must always find a bogy man. The current bogy man, whether in the Daily Telegraph or other Conservative newspapers, is my right hon. Friend the Secretary of State for Energy. We are given a picture of multinational oil companies, with assets of hundreds of millions of pounds—more assets than many nation countries even within the continent of Europe--and decades of expertise in oil exploration, sitting in their massive tower blocks, perhaps not far from the House, trembling every time my right hon. Friend makes a speech. The mind boggles at these people who have all this expertise, who have been courageous in the exploration and development of North Sea oil and farsighted beyond the wit of Governments,


looking in the newspapers every day, seeing statements by my right hon. Friend the Secretary of State for Energy and being terrified.
The oil compjanies—it is legitimate for them to do so, but I think they are wrong —feel that they must protect their commercial interests. Therefore, they are busily engaged in a commercial propaganda war to try to get the best terms possible from the Government. In earlier days, when we used to speak about participation, we got the same old business. The argument was that, if the Government got their way with participation agreements, all hell would break loose in the North Sea, the oilfields would not be developed and so on.

Mr. Neil Macfarlane: Will the hon. Gentleman give way?

Mr. Hughes: Not at the moment. I got into considerable trouble on Friday for giving way too much. If I make as long a speech today as I did on Friday, I shall get into very serious trouble.

Mr. Macfarlane: It is on this very point.

Mr. Hughes: If the hon. Gentleman will wait until I have finished this point, I shall then give way to him.
Whenever licensing rounds have been about to take place, we have had major propaganda exercises by the oil companies saying that if this or that happened there would be gloom, doom and disaster. I take the view that the latest exercise by the United Kingdom Offshore Operators Association is another round in the gambit of trying to screw the Government at a time when it is felt that the Government are vulnerable.
We should not leave out of account the period when this propaganda began. We had the consultative document on the sixth round of licensing. There was speculation at the time that there might be an election and that perhaps the Government would be defeated. I believe that part of the general exercise to try to discredit my right hon. Friend the Secretary of State for Energy, who has done a first-class job, was the hope that the Government, being a little afraid of facing an election and under intense propaganda attack, would give way on some of the agreements.

Mr. Macfarlane: I should like to revert to the hon. Gentleman's remarks when he was denigrating the commercial record of the oil companies. Is it not true that the oil consortium in the hon. Gentleman's constituency has brought a great number of jobs to the region of Scotland? Is that not a valid fact which he should recognise?

Mr. Hughes: That only goes to prove the point that I was making. I was trying to be ironic, but it was above the heads of Opposition Members. The point was that these companies, with all their expertise and commercial instinct, were trembling in fear every time my right hon. Friend the Secretary of Energy made a speech.

Mr. Gray: He is a menace.

Mr. Hughes: I am glad that the oil companies will now read in Hansard that they are made of jelly and are terrified of my right hon. Friend.
On the sixth round of licensing there were 100 applications for the 46 blocks on offer. It is perfectly true—I do not seek to evade the fact—that some of the major oil companies did not involve themselves in this round of licensing. But the interesting fact is that some of the people who are showing an interest in this round of licensing have not so far been involved in the North Sea. I appreciate that here we are concerned not only with the North Sea but with the South-West Approaches, the Bristol Channel and so on, but there are some people who so far have not been involved.
The Swedish State oil company is interested in a consortium which is involved. The Spanish State oil company is interested. It may be argued that these are not major companies, but at least there is diversity of involvement in this round of licensing, which is to be welcomed. Of course, we do not know precisely what the details of the offers are. We shall have to wait and see. But if we contrast this round with the previous one, which was two years ago—the fifth round —there were then only 55 applications covering 70 per cent. of the blocks on offer. But here we have 100 applications for 55 blocks.

Mr. Tom King: Perhaps the hon. Gentleman would like to check his figures with regard to the number of companies


involved. Since he attaches great importance to the success of the round by the number of companies involved, will he check the figures and establish whether 133 companies applied in the fifth round and whether 94 applied in the sixth?

Mr. Hughes: I did not say that there were 100 companies. I said that there were 100 applications for 55 blocks. That is the information given by the United Kingdom Offshore Operators Association.

Dr. J. Dickson Mabon: On 1st December 1978, in answer to my hon. Friend the Member for Dunbartonshire, West (Mr. Campbell), I listed the companies in Hansard, and there are 94.

Mr. Hughes: I have not added them up, but that is still oversubscribed compared with the previous round. Indeed, in earlier rounds, a massive number of blocks were on offer. But the uptake was very small compared with the number of blocks on offer.
If, as I believe—I hope that we shall have this confirmed—the Government's strategy is to put on offer a smaller number of blocks more frequently, it is my opinion that that makes good sense. Rather than have huge areas, it is much better to have selected blocks on offer in different parts of our shores so that by narrowing down the number of offers we can judge what the interest is.
If we did that, I believe that we would get a much better return. Both Conservative Front Benchers and Back Benchers are very coy, silent and hesitant about telling us what happened when they were in charge of licensing. Would they tell us how much money their Government lost the nation by their licensing policy? I bet that they would not, because it runs into a very large sum of money indeed.

Mr. Forman rose—

Mr. Hughes: I must not give way. I want to make a brief speech, because I got into trouble on Friday. I do not want to go on too long. The facts are there. The previous Government lost a hell of a lot of money, which is why Conservative Members are so quiet about it. It is an absolute scandal which must be put right.

Mr. Forman rose—

Mr. Hughes: I shall not give way. They certainly lost £65 million at least, and probably a good deal more. Although I do not have the figures with me, my impression is that it was about £750 million overall. Of course, the major difference between them and us is simply that they always want the private commercial interests to get the best returns while the State suffers.

Mr. Tom King: Will the hon. Gentleman give way?

Mr. Hughes: No. The hon. Gentleman can catch the eye of the Chair when the time arises, but I shall not give way. The Conservative Opposition always want the profit to go to the oil companies. That is the truth, and that is why Conservative Members are getting excited about it. They do not like the truth being told to them.
When we consider the history of the exploitation of energy sources, and the way in which the coal mine owners actually raped the resources of this country and damned the miners to a hellish existence, such as lack of safety and loss of life, do we really expect commercial interests to look after the welfare of the people in the North Sea? When we consider the loss of life in the North Sea, are we really saying that the oil companies should be allowed carte blanche?
The hon. Member for Gosport (Mr. Viggers) said that it was a good job the Government did not have control of BP, because there was a tremendous environmental battle in Alaska and he did not believe that had the Government had control they would have forged ahead in the face of environmental interests. I do not believe that commercial companies throughout the world have ever taken account of environmental interests, so why should we leave it all to the oil companies?

Mr. Gray: I am most grateful to the hon. Gentleman for giving way when he has been under pressure. Is it not the case that this Labour Government did have control of BP? They had more than 16 per cent. above the 51 per cent., and they got rid of it. How on earth can they possibly say that they want to take BP into more complete public ownership?

Mr. Hughes: That does not answer the point about whether the Government would have forced through the Alaska pipeline business against environmental interests had they had a greater control of BP, as was suggested by the hon. Member for Gosport. I do not believe that the oil companies should simply be allowed to go ahead without any control whatever. In the earlier days of the oil companies' activities in the Middle East, the ordinary people of the Middle East did not benefit from those activities. It is certainly true that since the oil shortage, and since the Middle East countries tightened up through OPEC, many more resources have gone back into the Middle East. But, if one goes to any part of the world where oil has been discovered, one does not find that the ordinary people of those countries have reaped the kind of benefits which ought to have been available from the wealth which was exploited.
Of course, Labour Members believe that a tremendous number of jobs are at stake, not just in the oil industry or in spin-off. We want to see the money go to the nation in order to regenerate British industry generally, which has had an appalling record of investment, and also to redevelop city centres, where there is also a great need for regeneration. We want to see these matters pursued in favour of the nation and the people.
The fact is that Conservative Members cannot hide their hatred—indeed, their detestation—of the British National Oil Corporation. On every occasion they denigrate BNOC and say that it is doing a bad job. The hon. Member for Carshalton (Mr. Forman) said that there were some worries about the poacher-gamekeeper activity of BNOC. He said that he was worried that some of the oil companies might have to make available to BNOC information which I think he said was commercially confidential. He was concerned lest that confidential information should be made available to the Government. Surely the hon. Gentleman is not suggesting that the oil companies have some information up their sleeves which ought to be within the knowledge of the Government but which is being hidden by the oil companies, which are unwilling to make their commercial activities available to this country. We ought to make quite certain that they do.

Mr. Forman: The point I was making was that it is the dual and anomalous role of BNOC, both as adviser to the Government and in some cases as partner with private oil companies, which is so invidious to the oil companies concerned and so damaging to their confidence that the commercially confidential information, which must be present in oil company dealings, is being passed over in a backhand way to the Government.

Mr. Hughes: If the oil companies have information of their commercial dealings in this country, and of their dealings in relation to exploration and production in the North Sea, it would be quite atrocious if they tried to keep it from the Government. If that is what the hon. Gentleman is saying, I hope that BNOC will make it available, because if commercially confidential information about activities in other parts of the world came within the purview of BNOC I am quite certain that it would be passed on. But that is not really a matter for debate now.
I ask Opposition Members precisely where they stand in relation to BNOC. I am sure that the hon. Member for Ross and Cromarty (Mr. Gray) will forgive me for making reference to a television programme in which he and I were involved. It was in Aberdeen about a month ago. It was a very good programme. I thought that I was good and the hon. Gentleman thought that he was good. I do not know what the customers thought.
We were discussing the question of BNOC. I asked the hon. Gentleman in that programme—and I do so again now —whether he would tell the country what the Conservative Party's policy was towards BNOC. For the benefit of those who did not see this excellent programme from Grampian Television, I shall tell the House what the hon. Gentleman's answer was. He said "We shall have to wait and see until we become the Government." That was his answer. The hon. Gentleman is nodding his head to confirm it. That is not good enough. If Opposition Members claim the right to be part of the government of this country and are continually attacking BNOC and my right hon. Friend the Secretary of State for Energy, they must do the other thing as well and say positively what they see as the role of BNOC.
The hon. Member for Ross and Cromarty went on to say, I think, that the


Conservatives would like to see the role of BNOC reduced. How far reduced? I believe that they would like it to be reduced to the point of extinction.
I end as I began. I believe that the Conservatives are solely concerned with putting forward the commercial views of the oil companies. I believe that it is the old slogan when the Conservatives are in difficulty on their own policy—" When in doubt, find a scapegoat." They have allies in what is left of Fleet Street that is still operating. I do not know what the hon. Member for Gosport will do next time he speaks, because The Times is not printing any more and there are no helpful leaders. It seems to me that Conservative Party policy is made in the leader columns of The Times, and that certainly is not the best source.
I hope that whoever replies to the debate for the Opposition will tell us clearly what the Conservatives see as the role of BNOC and whether they will, for once, stop running down the great benefits we get from the North Sea, will show a bit of patriotism for once, and will do a litle less kowtowing to their paymasters in the City.

5.12 p.m.

Mr. Neil Macfarlane: The speech of the hon. Member for Aberdeen, North (Mr. Hughes) was extraordinary, particularly the latter part. I do not know quite what the residents of Aberdeen, North will make of it when they read Hansard, if indeed they do, or if he ever becomes a spokesman on the various energy requirements within the Labour Administration. It was quite clear that many of his observations were palpably incorrect and totally untrue. I find it very difficult for us to accept his accusations—in this case, that we are always looking for somebody to knock. One could easily counter that particular argument and say that the hon. Gentleman was knocking entirely the oil industry, which has brought enormous employment to his region and untold benefit for the future of this country.
I certainly do not intend to make any observations from the Opposition Back Benches about our policy for the future of BNOC, except to say that many of us believe that there is a role for an organ

isation to co-ordinate the energy infrastructure of the United Kingdom.
What we on these Back Benches want to know about is precisely what BNOC is up to. It seems to receive special favours. It seems to receive all kinds of benefits and advantages which are not open to scrutiny by the House. The hon. Gentleman must surely be only too delighted to exercise some kind of parliamentary privilege. I can only repeat that the people of Aberdeen, North must be well aware—more aware than their own Member of Parliament—of the number of jobs which have been brought to that region as a result of the oil industry and North Sea oil policy.
I suggest that the hon. Gentleman really ought to spend time, if he has not done so—he will forgive me if I am wrong in suggesting this—in making a series of visits to Sullom Voe and to oil rigs and the Aberdeen offshore activity. He may have done that as a former Minister. I do not know. But the time has come for him to renew some of the information which may have temporarily got lost somewhere in the backwaters of his mind.
I congratulate my hon. Friend the Member for Gosport (Mr. Viggers) on introducing this important subject and particularly on the way in which he highlighted so many points of concern during the course of his excellent speech.
I want to examine two or three aspects of this matter. I do not want to go into the flights of fancy in which the hon. Member for Liverpool, Walton (Mr. Heller) engaged. I want to discuss matters which I think the Government have overlooked—not necessarily only the Department of Energy but the Treasury as well—in the past three or four years. I think that their most recent actions have contributed to the general lack of confidence which prevails in the North Sea at this moment and in the whole activity of underwater exploration around the United Kingdom.
We have had bland assurances from various Ministers, but I think that most of us are—certainly I am--prepared to accept the blandishments of the Minister of State, Department of Energy, not only in the long hours that we have spent in Committee over the past two or three years, but also in some of the warm replies which he has given at Question


Time. But, despite that, there is undoubtedly a declining confidence in further investment in the North Sea. It coincides, alas, with a number of known factors.
At the risk of incurring the displeasure of a number of Labour Members, including the hon. Member for Walton, I must say that one of those known factors is the presence of the Secretary of State. Whilst it may be encouraging to be told by the Minister of State today that his right hon. Friend is currently appearing before a Cabinet committee, the fact is that he is not present in the House this afternoon when the specific wording of the motion goes into some detail and criticises his own role in the last couple of years. It is a great pity that the Secretary of State is not present this afternoon.
I come back to the point that the hon. Member for Walton raised, this mock insult which he seems to think that the press and we are always hurling at the Secretary of State. The hon. Member said that he could not understand why we were always selecting the right hon. Gentleman to fire our shots at. All I can say to the hon. Gentleman—I lo not want to take up too much time, although, in view of the empty Benches on both sides of the House perhaps I may have to—is that one has only to look at the right hon. Gentleman's record from the 1960s, when he became a member of the first Labour Administration in 1964.
Alas, looking at the right hon. Gentleman's record in great detail. we find that it is strewn and littered with failure. It goes from the Post Office and moves to the Ministry of Technology. Alas, there is then a period in Opposition when the destructiveness which the right hon. Gentleman then vented upon the trade union movement in opposing the policies of my right hon. Friend the Member for Sidcup (Mr. Heath) is well known. The right hon. Gentleman then moved to the Department of Industry. He had to be moved from there. He was then moved to the Department of Energy. If any Department requires a constructive mind to be brought to bear upon planning in the United Kingdom, it is certainly that Department.
Unhappily, there is one continuing theme throughout the right hon. Gentleman's record in public life. It may have been a thoroughly effective record in the latter years of the war, but the fact is that he is a lifelong politician and he brings no commercial or industrial experience or discipline to anything that he does in the House of Commons or in public life. That is the great tragedy.
The worst feature is that in recent years the right hon. Gentleman has read the book The Seven Sisters ". We know that because he has frequently quoted from it during debates, at Question Time and in Committees. He now sees himself as the man who will break the great international oil company cartel and try to change the constitution of commerce The simple fact is that he has not been the same man since he read that book.

Mr. Heffer: The hon. Gentleman again says something about my right hon. Friend and accuses him of doing something when in fact he was not involved at all. The fight against the Industrial Relations Act was not in any way the fight of my right hon. Friend the Secretary of State for Energy. He had absolutely nothing to do with it. I sat on the Opposition Benches with my right hon. Friend the Member for Blackburn (Mrs. Castle), week in and week out, month in and month out, fighting the Industrial Relations Act of the Conservative Government. As far as I know, my right hon. Friend the Secretary of State for Energy hardly expressed an opinion in relation to that question.
The hon. Gentleman, as on so many occasions, takes the opportunity to say that my right hon. Friend does things which he does not do. Last Monday there was a meeting of the organisation committee of the Labour Party, of which I happen to be chairman. The next day the press said that my right hon. Friend was responsible for a motion, that he was going to lead a deputation to the Prime Minister, and so on. It was absolutely untrue. I moved the motion. I am the chairman of the organisation committee. But, of course, it is convenient to attack my right hon. Friend. That is exactly the point that we have been making. On all these occasions, my right hon. Friend is: blown up into a great bogy man because


it is convenient for the Opposition to do so.

Mr. Macfarlane: I return to the point mentioned by the hon. Gentleman at the beginning of his intervention. The hon. Gentleman said that it was he and the right hon. Member for Blackburn (Mrs. Castle) who, in Opposition, fought the Industrial Relations Bill in the early 1970s. Shall I tell him what the present Secretary of State for Energy was doing then? While the hon. Gentleman and the right hon. Lady were here being good parliamentarians, the right hon. Gentleman was cavorting around various strongholds of the trade union movement, harnessing them before they marched down Whitehall and Holborn. The hon. Member for Walton is like us and the vast majority of the people—he is being hoodwinked by his parliamentary colleague.
What is the worst feature? I imagine that many people in the constituency of the hon. Member for Walton have received employment as a result of the oil industry over the last decade or so. But, alas, Britain's economic condition seems of no concern to the Secretary of State for Energy. That is the worst feature as it strikes many of us in industry. The right hon. Gentleman may well succeed in rolling over the oil industry in the long term, and in changing the course of the international oil industry, because, alas, the oil industry does not seem to be determined to fight for its survival.
I do not admire many of the tactics and habits of the oil industry over the past 20 or 30 years, but it has given employment to hundreds of thousands of people throughout the United Kingdom. In the 1960s and into the 1970s, it has become a classic example of private enterprise giving an exciting and dynamic lead to the future of our economy.
But there is a question mark over the future of more exploration in our waters. Once again, Socialism has imposed its traditional tax regime which, as many of us warned two or three years ago, is deterring further activities. That is shown by the Written Answer given by the Minister of State on 4th December. One sees the picture from that. My hon. Friend the Member for Ross and Cromarty (Mr. Gray), in Oral Question 18, asked

 how many oil exploration wells were drilled in the North Sea during the period June to August for each of the years 1976, 1977 and 1978, respectively.
That Question was not reached for oral answer, and the reply was circulated as a Written Answer. In it, the Minister of State said:
 During the period June to August in each of the past three years, the numbers of exploration wells spudded in the United Kingdom continental shelf were 17 in 1976, 22 in 1977, and three in 1978.
That is the situation after three or four years of intense Socialism. That is the sort of thing that worries so many of us.

Dr. J. Dickson Mabon rose—

Mr. Macfarlane: I will give way to the Minister of State. I always do. I never fail to give way to him either on the Floor of the Chamber or in Committee. I would never fail to do so. It will be a bad day for the House of Commons when I refuse to give way to the Minister of State. The right hon. Gentleman went on to say:
The Department is analysing the reasons for this reduction with the United Kingdom Offshore Operators Association and BNOC ".— [Official Report, 4th December 1978 ; Vol. 959, c. 470.]
The conclusion that one draws is that the Department is not aware of what is happening and is not in a position to try to instigate a greater degree of activity in the North Sea.

Dr. Mabon: I, too, regretted that we did not reach that Question orally. One can only answer Questions as they are asked. When there is a chance for supplementary questions, one can supplement one's answer and make it more reasonable. The hon. Member for Bridgwater (Mr. King) used that misinformation, if I can call it that. That answer was misleading. It was true in itself but misleading in its generality, because so far in 1978 we have drilled not three but 58 exploration and appraisal wells. That is a very big difference from three.

Mr. Macfarlane: It is a very big difference from the answer that the right hon. Gentleman gave exactly a week ago. The fact is that he knows that even those statistics are down on previous years.

Mr. Tom King: This situation is quite extraordinary. In the last four days we


have had the most rapid expansion of exploration drilling ever in the history of the North Sea, because the Minister of State said that the number expected for North Sea exploration drilling was 58.

Dr. Mabon: No. I said that we have actually drilled 58 exploration and appraisal wells in 1978.

Mr. King: My hon. Friend will have noticed that the estimate given on 4th December was 39. I should be grateful if the Minister of State could clarify that point.

Mr. Macfarlane: This highlights the fact that the Secretary of State and the Department of Energy are not really aware of what is happening, because I have merely quoted from the answer which the Minister of State himself gave a week ago. I am not criticising him because he did not answer the Question in the House. I recognise only too well that Mr. Speaker got to Question 14 or Question 15 and that it was not the Minister of State's fault that he could not get to Question 18 and answer it in detail on the Floor of the House. I have quoted from the Written Answer given a week ago, which gave a figure of three in 1978. The Minister of State's concern was justifiably highlighted, but why he needed to analyse this detail which has suddenly become available to the Department of Energy and the UKOOA is mystifying. If only a UKOOA representative sat in the chair of the Energy Commission, it might have been in a better position to make its presence felt a little more.

Dr. Mabon: The Energy Commission met on 1st December, and the UKOOA was the first item on the agenda. It presented a paper in which it argued—I believe that the hon. Gentleman has seen the paper—the case about the position of exploration and appraisal wells. My complaint about Question 18 last Monday is that it confined itself to three specific months of the year when it should have been concerned with the entire picture. Otherwise, it is guilty of selectivity. I am trying to help the House by showing that the number of wells drilled in 1978 is 58—and that is not an estimate. The hon. Member for Bridgwater (Mr. King) must realise that the figure"three" is a grotesque version of events such as he recited at the weekend.

Mr. Macfarlane: It is extraordinary that the Minister of State, who is an experienced parliamentarian, did not take the opportunity to tell the House that over the whole year the picture might have been slightly better. It is unlike him to ignore such a point. But I am interested to hear him say that when the Energy Commission met on 1st December the UKOOA was first on the agenda. Perhaps I can attract the Minister of State's attention from the assistance of the Prime Minister's Parliamentary Private Secretary, whose presence we always welcome. No doubt the Minister of State will keep him closely alongside. That afternoon, was the UKOOA represented by its own representatives or by the chairman of the Petroleum Industry Advisory Committee, who is chief executive of Esso? One of the difficulties we have is in trying to find out just what the Energy Commission is doing and just how powerful it thinks the UKOOA should be or is.

Dr. Mabon: The answer is that Mr. Dyk, chairman of the UKOOA, was present, together with the secretary-general, Mr. Williams, who presented the paper.

Mr. Macfarlane: That is encouraging to note, and no doubt the right hon. Gentleman will enable the House to have a copy of the exchanges that took place by placing one in the Library. We attach great importance, as the right hon. Gentleman knows from previous exchanges, to the UKOOA being represented at the Energy Commission. It is of paramount importance, because there is only one representative from the oil industry at that table.
The Government must come to terms with understanding the problems facing private enterprise. The industry is now beginning in great detail on the production side of oil activity. Operating costs in the North Sea have soared. They have more than doubled in the past year as a result of operating expenditures. The biggest increases have occurred where the fields are at last producing oil. Miss Sue Cameron wrote in the Financial Times some weeks ago of
 the rise in estimated operating costs for the Heather Field at 220 per cent., for Fulmar at 156 per cent., Thistle 133 per cent., Piper 143 per cent., and Claymore 144 per cent. All these, except Fulmar, are producing oil.


Cost estimates have continued to increase dramatically in the case of operating expenditures…Now that several fields have been in production for over a year, more realistic estimates are possible, and increases of 100 per cent. or even more over our previous estimates are common.
In addition, there are rapidly escalating costs of inspection and maintenance, and capital costs have risen in many fields. Yet I believe that by their recent tax impositions the Government have shown no detailed understanding of this new dimension to the North Sea operation. I do not think that their timing could have been any worse.
Another area of concern to oil companies is the unknown cost and life specifications of production platforms. The House well knows the extremes in which the oil companies are operating in the northern North Sea. It is almost a certainty that the costs of maintenance above and below the water will exceed the most accurate forecasts by the experts. It is reckoned that it will cost the industry at least £400 million in the first year of full production by the 1980s. The figure may well rise, because there is no certainty as to how structures and pipelines and other semi-submersible and fully-submersible structures will react in the conditions of utmost severity, which are without equal anywhere else in the world.
Some of us used our time in the Summer Recess to visit those waters in September and October. Shortly after we began our visit to the Brent field and Sullom Voe, there was a blockage in the pipeline which resulted in enormous cost and delay to the oil companies in bringing the oil to Sullom Voe. It was the kind of thing they could not have forecast when they were budgeting for what the entire range of North Sea commitments would mean.
The companies need time to assess such costs. They do not require a series of tax threats by this Government. They certainly do not want the deterrent of nationalisation, such as the Minister's right hon. Friend called for at the Labour Party conference this year and from other platforms.
The kind of article that one reads in the newspapers highlights the reason why not all companies have participated in the sixth round. The whole atmosphere of

confidence is declining, as was shown by an article by Roland Gribben in The Daily Telegraph a few days ago. I do not know the full details. I would not pretend that I do, because it is now five years since I have had day-to-day experience in the oil industry. However, the article highlights the concern felt by international oil company finance chiefs. It said:
 Concern that the Government would again break its word and change North Sea oil tax regulations was expressed yesterday by a senior Royal Dutch Shell executive ",
who was reported as saying
 that he feared the moves to increase petroleum revenue tax from 45 per cent. to 60 per cent. may be the forerunner of further changes which will alter the rules again '.
Exploitation and production operations were always something of a gamble but how can you assess the degree of risk when the odds are likely to be changed after some of the cards are down? ' 
That is the kind of atmosphere created by this Government. It is not entirely the responsibility of the Minister of State. It results from some of the observations of the wilder men of his party, who are absent today. Companies are concerned, and there is a lack of confidence. The timing of so many Government tactics, spearheaded by the Secretary of State, could well kill off the longer-term exploration required by the United Kingdom.
The sixth round has not been the success that Ministers claim. How can they claim that it has been a success when some of the majors have not even bothered to apply? The reason is clear, for many of them are looking in other waters. If the United Kingdom is to locate more oil potential, it needs to have all the international companies competing, and that is not happening.
What is clear is that the United States, with its massive problems of the dollar, unemployment and huge oil imports, which are affecting Western civilisation generally, will mount a vast offshore exercise for its own good. The fact that there is so much potential in the Gulf of Mexico and the Baltimore Canyon, together with the disincentive under this Government to maintain exploration here in view of the different tax regimes in America, will act as a double incentive to those companies with the most to offer in resources. Already we can see


the exodus beginning from United Kingdom waters to waters in the Middle East, the Far East or America.
There is the further fear that the Government will again break their word and change their North Sea tax regulations. When we add together the dramatic production costs, the falling price of crude oil in real terms and a cash flow problem in the oil industry, we have a whole range of serious economic deterrents to risk-taking. That is what North Sea exploration is all about—risk-taking. I only wish that the Secretary of State were here tonight. He has not bothered about that kind of equation.
I return to the point, because it is so important, that the right hon. Gentleman does not even consider that UKOOA is worthy of a seat at the Energy Commission. Indeed, all that he requests is the presence of the chairman of PIAC. UKOOA makes an enormous contribution, and it is a great pity that the Secretary of State does not acknowledge that contribution and the contribution of the number of small oil operators that are now beginning to move into the North Sea as a result of the sixth round applications. They should be represented, and the only way in which they can be represented is by being at the Energy Commission table.
I hope that the Minister of State will urge his right hon. Friend to start taking an interest in energy matters, to begin to put them first in his daily routine. Many of us, not only in the House but throughout the country, have the impression that the Secretary of State's time is consumed by heading up Labour Party caucus meetings—the national executive committee or the home affairs committee—and drafting documents, and that the last thing he takes any interest in is energy. His destructive presence is a matter of great disappointment to those of us who believe that energy demands a constructive mind to plan for the United Kingdom's future.
The Secretary of State should realise that the oil industry has given the United Kingdom an enormous opportuniy, one that it has not had for 60 years. That opportunity is self-sufficiency. But it must be recognised that we must plan for future generations. Between now and the early 1990s we may well be in a period of good oil production, but planning for

future generations means keeping up the rate of exploration and maintaining in the oil industry a desire to work in the waters off the United Kingdom.
The industry's whole record in recent years is one of remarkable achievement. Those of us who have been to Sullom Voe, Aberdeen and rigs in the North Sea, particularly in the northern North Sea, have seen for ourselves the traditional manner in which oil companies have overcome extreme conditions. At Sullom Voe, as in so many international oil projects associated with the North Sea, the companies underestimated the complex nature of the task of construction, whose cost is likely to top £800 million. The project has given work to 6,000 people, and by the 1980s it will be handling more than half the United Kingdom's crude oil requirements.
I ask the Minister of State to bear those statistics in mind when he is conferring with his right hon. Friend, because I believe that some of those important statistics are lost sight of. The development at Sullom Voe is an enormous achievement. At long last, it is now on stream. When the oil industry is planning for the future, it is not always aware of the cost. It can never know for certain. So if we are to maintain confidence, the Secretary of State and his Ministers at the Treasury must not introduce a deterrent. The Government are not making it easy for the oil companies at the moment. It is as simple as that.
The Government are not helping to attract and retain further foreign investment in our country. It is essential to ensure easier terms to explore in the northern North Sea arid elsewhere in our waters. The number of discoveries reached a peak in 1975 when 75 wells were drilled. In 1976 and 1977 there were 10 finds from 51 wells and 58 wells respectively. Since the middle of the 1970s there has been a decline. That decline has coincided with a general lack of confidence and a decline in the taxation record of this country and of this Administration.
If the Government and the country are to survive and take the exploration of more oil wells through into the 1990s and beyond, they must attract foreign investment. Unhappily, Socialism and further nationalisation have usually acted as a severe deterrent to foreign investment in the United Kingdom.
I give that message to the Minister of State and hope that he will ensure that his right hon. Friend understands the arguments about which we feel so passionately. We want to see long-term employment in this country, just as much as the hon. Member for Walton and the hon. Member for Aberdeen, North. We may argue about the means of getting there, but the fact is that the oil industry has given untold employment to hundreds of thousands of people throughout this country and is still doing so. I hope that the Government will not continue with the policies that they have followed for the past three or four years in deterring future foreign investment. We owe it to future generations to maintain the level of exploration and investment. I urge the Minister of State to apply his mind in great detail to this argument when he replies.

5.42 p.m.

Mr. John Hannam: I apologise for the huskiness of my throat. I do not know whether it is Mao, Brezhnev or "Wedgie" flu, but it is working effectively on my throat at the moment.
I congratulate my hon. Friend the Member for Gosport (Mr. Viggers) on initiating this valuable debate on the state of our North Sea oil industry. Governments and Secretaries of State are always happy generally to conceal the true state of affairs of their Departments under fairly self-satisfied assurances that all is well and developments are going according to plan. Whenever doubts are cast upon their actions, certainly in the oil sector, they retreat behind those well-worn allegations that anyone who dares to criticise them or question their activities is in the pockets of the oil companies.
There is grave disquiet over the effects on our whole energy sector of the Secretary of State's unconcealed political machinations. Whether it is in his own particular subservience to the National Union of Mineworkers or his refusal to give way over the restructuring of the electricity industry, or because of his declared political objective of the nationalisation of North Sea oil, I do not know, but what he is really doing is creating a gulf within the Department of Energy and causing a serious loss of confidence in the future stability of North Sea oil investment.
Labour Members may huff and puff about the oil companies. It is easy to frighten the public into believing that they may be taken for a ride by the multinational companies. I owe nothing to the oil companies. I am just interested in securing a good energy policy for Britain. and party politics should not enter into that objective.
During the past four years I have repeatedly questioned the Government's fixation with State control of the oil exploration and development companies. I am convinced that State control equals State bureaucracy, which equals lower investment, efficiency and production. The control of oil, the depletion rate, and the tax take could all be determined without BNOC and its 51 per cent. stake.
However, BNOC, and nationalisation through BNOC, are an argument for another day and it is no use trying to convince the Labour Party that Socialist planning is self-defeating. It learns that lesson only when its ventures collapse and the taxpayer has to bail it out.
As an unbiased oil observer, I would not accept blindly the demands from the United Kingdom oil companies for a more liberal tax regime, but I am convinced that there is a dangerous decline of confidence on the part of the larger expert oil companies in the continuing political and financial stability of the United Kingdom sector.

Mr. Helfer: Can the hon. Gentleman explain to the House why, if companies collapse only because of public ownership. Rolls-Royce had to be bailed out? Why was British Leyland on the point of collapsing? What about Alfred Herbert? What about the shipbuilding companies in this country that were all on the point of collapsing and have had to be rescued in order to keep the shipbuilding industry in operation? The list is as long as my arm, and they are all private companies.

Mr. Hannam: Nearly all of those companies got themselves hooked into State control, either through ordering or through dependence upon the State. That is another danger which faces great companies when they find themselves drawn into and intertwined in State ordering and State programmes of buying. That is what has happened in many of those industries and is happening in British Leyland.
We now see the danger of its happening in the North Sea.
I am convinced that there is a dangenerous decline of confidence on the part of the larger expert oil companies, and we must do something about it. The evidence for this belief comes from a wide range of sources and is borne out by the underlying trends of the sixth round and the declining drilling activity. Every week we see reports of a decline taking place. The absence of The Times does not necessarily mean that these reports are not coming through, because I have a whole host of them which I could quote if necessary. There are reports of lower estimates of reserves, and, interestingly enough, this represents an ultimate loss of £18 billion worth of oil. Drilling rigs are under-used and are beginning to move abroad for work. I have seen reports of this. There is less marginal field development, and we depend upon that in order to meet in 1985 the target of 2½ million barrels a day. With vast new fields being developed in Mexico and possibly elsewhere, there is a temptation for the expert oil men to up rigs and leave.
While the rewards for vast risk investments were of such a size as to attract investments, there was no problem in attracting both the oil experts and the financial backing. The picture has begun to change and it is now obvious that the oil companies have had to move non-resource financing at the same time as potential yields of oil are beginning to fall. If one adds a Government who, because of their political objectives, are changing the very premises on which the original investment programmes were worked out, we begin to see that there is a dwindling of confidence.
Risks are now greater in all directions of oil activity, and, with the increased tax and royalty take, smaller oil companies will have to take greater risks and will find greater difficulty in raising development finance. If we begin to drive the larger oil companies away from United Kingdom waters and rely on BNOC, we may please the Socialist planners, but we shall be destroying the real profits which this country needs from the North Sea.
My hon. Friends have presented adequate proof in their arguments today that the sixth round has not been the unbridled success that the Government

held it to be. The Minister of State, being a reasonable man—and we all accept that he is a reasonable man—is concerned with the situation. He will no doubt engage in his usual knockabout "pockets of the oil companies" retorts when he replies to this debate. But, come the spring Finance Bill, I would not be at all surprised if the tax and royalty proposals are not modified. What will provide proof of the Government's policies will be the full details of the sixth round applications and the projected exploration programme which will follow. The proof of the pudding lies in the eating. Unfortunately, in this case that will mean the inevitable shortfall in our North Sea expectations.
Much of the argument today has revolved around the role of the BNOC. and I should like to deal with a few of the financial implications of the creation of this State oil agency. The Secretary of State for Energy and the Minister of State are always diligent to seize every opportunity to laud the Government's creation of the British National Oil Corporation. They do not often mention the magnitude of expenditure of public funds that will be necessary before the nation can ever hope to receive any return on those excesses of public spending.
To demonstrate this, I refer to the minimum commitment that BNOC has assumed following the decision of the Secretary of State to give it a 51 per cent. working interest in the 1977 fifth round of United Kingdom offshore licensing. In that round, 44 of the 71 blocks on offer were awarded conditionally to selected private company applicants, provided that in every case they concluded operating agreements with the BNOC.
On the not unreasonable assumption that an average North Sea well costs $5 million and that any further seismic work that has to be done on the blocks before the drilling site can be chosen is relatively small in amount compared with the average well cost, the following set of figures can be developed. In the exploration phrase, at least one well will have to be drilled on each block. BNOC involvement, therefore, worked out on the basis of 51 per cent. of the £2·5 million times the 44 blocks, equals £56 million, and these figures arc probably


out of date already from when I put them together.
On the assumption that one-third of the exploration wells will give sufficient encouragement to call for the further drilling of two appraisal wells to assess the discoveries made, the BNOC will have a further involvement of 51 per cent. of the £2·5 million times 28. Therefore, we have a further involvement of £36 million.
Thus, to complete just the exploration and appraisal phase of the fifth round, the BNOC will probably have spent £92 million. That figure is the one which the Secretary of State would not give when he was questioned in the House on 9th February 1977.
On the final assumption that one-third of the appraisal drilling will result in decisions to formulate development plans for oil and gas production and that a modest development programme is likely, therefore, to cost a minimum of £300 million, the BNOC will have a further involvement of £765 million. So the grand total of exploration, appraisal and development involvement of the BNOC alone in the fifth round thus becomes £857 million.
I stress that this involvement is a minimum estimate which in reality could be considerably higher. It is no wonder that the terms for the sixth round of offshore licensing which closed on 20th November were changed radically so that the BNOC would have only a working interest initially in the sixth round blocks where it was designed to be the operator. On the other 40 blocks of the round the private company applicants were required to meet the BNOC's potential involvement in the exploration and appraisal phases until such time as development was agreed upon by all the parties to a licence when, of course, BNOC would change its status and become a working interest participant which would refund earlier drilling costs.
I turn now to the time scale on a similar minimum basis. At best, appraisal drilling could be completed two years from the date of the confirmed award of a licence. Any resulting development plan would take at least a year to devise and to be officially sanctioned. The completed execution of that plan would require at least three years. So the total time scale to first production is therefore

six years after the confirmed award of a licence.
That is not the end of the story, however. Due to the fact that the finance raised for a development project has to be serviced and redeemed before any positive cash flow is achieved, most public economic analysts state that at least a further three years would be required to reach that position.
To sum up, we have some £857 million of public funds to be spent by the BNOC in the by no means certain attainment of oil and gas production from the confirmed awards of blocks contained in the fifth round. Despite the claims from the Government Benches, it is unlikely that there will be any profit from that investment until 1985 at the earliest. Is there any justification other than dogmatic Socialism, therefore, for spending such amounts of public funds when private industry is willing and eager to finance offshore operations, provided fiscal conditions are not too onerous? As my hon. Friends have shown clearly, with the present Secretary of State in charge of our energy affairs, political dogmatism reigns supreme, and the country will bear the cost.

5.54 p.m.

Mr. Raymond Whitney: I am happy to join my hon. Friends in offering congratulations to my hon. Friend the Member for Gosport (Mr. Viggers) on his foresight and percipience in giving the House the opportunity for this debate. I am also sad that this seems to be the second debate on successive parliamentary days which should be unnecessary with any sensible Government in office.
On Friday, thanks to the enterprise of my hon. Friend the Member for Edinburgh, Pentlands (Mr. Rifkind), the House debated the prospect which seems to be before us of the Government acknowledging and acceding to a demand to impose economic sanctions on South Africa—a prospect which obviously has appalling consequences both for our economy and for South Africa.
We now face another appalling prospect for our economy. It seems to me that the debate should be unnecessary, but, as I say, I congratulate my hon. Friend the Member for Gosport because we have to bring home to the Government the need


to create, as the motion points out, the necessary economic climate for the correct development of Britain's oil resources and to end the uncertainty with which they have been surrounded by the Government and their spokesmen.
Sadly, this debate seems to be all too necessary, and the need for it was underlined a few moments ago by the hon. Member for Liverpool, Walton (Mr. Heffer). I arrived to hear his speech, and I had the feeling that I was cast back to 1945 or 1946. I had the impression that this was the re-run of a rather flaky black and white old-time "B" picture or, to mix the metaphor a little, that we were back again with the Bourbons, who forget nothing and learn nothing. There is no doubt that the hon. Member for Walton and his right hon. Friend the Secretary of State are latterday Bourbons.
Yet again, we have the tired old projection of the idea of the British people wanting to control the oil. Of course, they do. But we must ask ourselves whether the British people enjoy the control of Britain's coal and Britain's steelmaking. Are they happy with the way things are going? Of course, they are not. The prospect of Britain's oil being controlled even more tightly than at present by the Secretary of State for Energy is enough to send most British people storming to the polling booths. It is only a slight consolation to accept that the Prime Minister is well aware of the effect on the British people of such a threat. Therefore, it remains to be seen how this internal debate within the Labour Party continues and how it is reflected in the manifesto which eventually is presented to the British people when the time, which cannot be escaped, arrives.
Whatever this may do to the inner advice and counsels of the British Labour Party is of no direct concern to Conservative Members or, I hope, to most people in the country. But what happens to Britain's oil is of interest to 'us all, and it is the effect which the alarming debate within the ranks of the Labour Party is having on the British oil industry which must concern us.
Looking at the economic facts, we have to understand that we cannot get away from reality, much as the Secretary of State for Energy tries to. We come into an area where it is not enough to indulge

in parlour-pink dialectics. We have to look at an international oil industry. This means that it has to be conducted with responsibility by a Government who create fiscal stability and who clearly are ready to honour the commitments which they undertake.
We have every indication at the moment that within weeks, or perhaps even days, it will become clear that Government undertakings are again in jeopardy. Indeed, it is clear already.
I hold no particular brief for the oil companies, but I recognise their achievements throughout the world. The international oil companies are faced with the uncertainties of this depressing domestic debate by the Labour Party. They are also faced with the realities of the external factors. They are faced with the rising costs in the North Sea lo which a number of my hon. Friends have referred. Operating costs have more than doubled.
With the pressure of the political storm which is being whipped up for purely domestic purposes on the one hand and the realities of the commercial and fiscal problems on the other, it is no wonder that confidence in the British oil industry has declined to such a degree. It is no wonder that the state of exploration in the North Sea is at such a low ebb.
As a complete non-expert in this area, I confess that I was left in some doubt by the tripartite exchange between my hon. Friends the Members for Sutton and Cheam (Mr. Macfarlane) and Bridgwater (Mr. King) and the Minister of State which we enjoyed earlier. Whatever the result of that exchange, the level of exploration in the North Sea certainly is some way down to the 1973 level. The Minister of State will correct me if that is wrong.
That situation causes the greatest concern. I understand that about 25 oilfields are currently in various stages of operation. In the early 1980s those 25 fields will offer about 2.5 million barrels a day. According to the expert evidence which I have had some opportunity to examine, there will be a rapid decline after the 1980s. That means that shortly afterwards national self-sufficiency will be lost again and we shall be back as a net importer. By 1990, on present figures, Britain will be a large net importer.
There is a need for a massive increase in exploration. The situation is deteriorating daily as the internal debate continues. We are most unlikely to achieve any level of increase in exploration, let alone the degree of increase which will be needed if the proper exploration of the North Sea's riches is to be set in train.
The danger that we now seem to face is that a great deal of the wealth under the North Sea could be left unexploited. Unless we run into some highly uneconomic operations, with the Secretary of State personally in charge, we shall be in serious trouble. Much of the oil that is there to be discovered might not be discovered.
The danger is increased by the Government's relationship with the BNOC and the Government's refusal to acknowledge the need to bring the BNOC under much closer parliamentary control. Their attitude to the BNOC gives the rub to the song and dance that was so well manifested earlier today by the hon. Member for Walton when he spoke of "the people's oil". Let the people, in the shape of hon. Members, have the right to a much greater control over the operations of BNOC. Without that, how is people's control to be manifested? I doubt whether most of the British people consider that the present arrangements are satisfactory—if they understand them, because I do not. 1 doubt whether they would approve of the relationship between the Secretary of State for Energy and the BNOC. I doubt whether they would agree to the extension of the role of the BNOC as a manifestation of people's control. It is far from that.
I shall explain the financial dangers. I am no expert on the subject of oil, and I am slightly less inexpert in the financial side, but I should like to draw the Minister of State's attention to the forecast produced in the Treasury's economic progress report no. 103 which was published in October of this year. The forecast for this year is that the net contribution of North Sea oil and gas to the current account of the balance of payments will be £3-2 billion—that is at 1977 prices. This happy prospect is to expand in 1979 to £4.5 billion, and in 1980 to £5.7 billion. In 1985, all being well with the exploration and the development of

resources, the Treasury forecast is that oil and gas will add £8.6 billion to our current account.
I should like to ask a number of questions about that. I do not wish to detain the House, but it seems to me that it is highly questionable that, on the present course, that projection or extrapolation will be maintained. I should be interested in the Minister of State's forecast. I should be even more interested to see where we are in two years' time if we continue on our present course. Should we embark on a course which has been foreshadowed by the NEC of the Labour Party, I think that the Treasury will be able to throw these figures away along with the computer of which the Chancellor of the Exchequer seems to have such a low opinion.
This year alone, our balance of payments is alleged to have benefited to the extent of £3.2 billion, yet when we look at the likely outturn of our balance of payments this year the probability is that we shall be lucky if we strike even. This is a measure of the financial and fiscal incompetence of this Government and the dreadful prospect for this country and the economy if the Government continue in office for many more months.
I suggest that, in the interests of the economy and the oil industry, the Prime Minister should acknowledge the logic of the position and give the choice to the people. When he does, he will find that the British people understand that private enterprise forged the way in the oil industry. They are not scared of private enterprise. They recognise that any sensible Government can achieve a modus vivendi and exert proper control over international companies—the same degree of control as international companies have accepted throughout the world.
They recognise that the real way of exploiting our resources is through the initiative and hard work that can come only through the free market system. It cannot come from groups of civil servants or politicians sitting in Whitehall or Westminster.

6.8 p.m.

Mr. Hamish Gray: I did not intend to participate in this debate, but in the true spirit of


debate I was prompted to do so by some of the remarks of Labour Members. 1 am sure that my hon. Friend the Member for Wycombe (Mr. Whitney) will understand if 1 do not comment on his remarks.
I draw attention to the terms of the motion, particularly to that part which reads:
 to provide an economic climate in which private enterprise can continue to make its contribution to oilfield development ".
This is extremely important. We should bear in mind, despite what has been said by Labour Members, that until January 1976 no less than 94 per cent. of the capital investment in the North Sea was private capital. It came from Britain and Europe and, largely, from American sources. With that in mind, we should examine the present situation. I am sure that the Minister will wish to draw attention to the sixth round at which a number of applications were made. We all welcome them. What is important about the sixth round is that one major oil company, with billions of pounds worth of investment already in the North Sea, has seen fit not to participate. This is the writing on the wall. Perhaps, we have been a little severe in our criticism of the Secretary of State, but his very presence in the post of Secretary of State for Energy must inhibit further investment in the North Sea.
Anybody who can be as irresponsible as the Secretary of State in his speeches at Labour Party conferences must undoubtedly be a liability for the Government. Probably the Prime Minister already realises this. Certainly we do. He is a liability to this country because of his attitudes.
It is sometimes forgotten that the Secretary of State is not alone. Below the Gangway on most afternoons sit a collection of Members—

Mr. Forman: Faceless men.

Mr. Gray: —who between them present a real challenge to the future prosperity of this country. If their attitudes and their collective utterances are to be taken seriously by oil companies or anyone else who wants to invest in this country, we will certainly find it difficult to encourage those people.
The Secretary of State for Energy, by a series of pronouncements, made not just

over recent years but over a very long period, must cast grave doubt on the future intentions of this Government. The time may come when the Secretary of State will hold an even more important position in this Government. Should that ever happen, it is little wonder that many major companies have doubts about future investment.
I am glad that the hon. Member for Aberdeen, North (Mr. Hughes) has returned, because he made some truly amazing utterances. He comes from the heart of Aberdeen, an area that has benefited to a great extent from 60,000 jobs created in Scotland. These jobs were created not by the British National Oil Corporation, except in its own office, but by the private oil companies. That is where the development prospects have emerged, but those prospects are being inhibited by this Government's policies.
I should like to refer to the third of the specifications laid down by my hon. Friend the Member for Gosport (Mr. Viggers). He called on the Government to clarify their intentions over British Petroleum in the light of the remarks of the Secretary of State for Energy at the last Labour Party conference. That selfsame Government, in which the Secretary of State was a Cabinet member, decided not to retain the 16 per cent. additional shareholding that they inherited in British Petroleum. They discarded the shareholding and yet at the same time they are calling for greater public ownership in British Petroleum.
Who can attach any importance to the utterances of a Government who behave in that way? I am not criticising the Government for not keeping the 16 per cent. shareholding. They were right. But they cannot now pretend that they want greater public ownership. This is all a sop to the Left wing, the people below the Gangway, the absentees from the House. There is not one Tribunite to be seen.
The Tribune group in this House now consists of more than 80 MPs. That is a fact of which people outside this House are taking note. They are not taking note of the moderates like the Minister of State. They are listening to the Left wingers who rule the Labour Party and whose views in this House are pooh-poohed by those in power but who make the policies: the people on the Labour


Front Bench are merely the people who have to administer and implement them.

6.14 p.m.

Mr. Tom King: I can understand how my hon. Friend the Member for Ross and Cromarty (Mr. Gray) felt impelled to speak in view of some of the rubbish to which he had to listen from the other side of the House. I do not think that any of my hon. Friends would disagree with his conclusions about the power of the Left wing of the Labour Party in the House of Commons.
I should like to congratulate my hon. Friend the Member for Gosport (Mr. Viggers) on his choice of subject for debate and also on his excellent speech. Like him, I much regret the absence of the Secretary of State. My hon. Friend did him the courtesy of sending him an advance copy of the motion last week so that he would be aware that it concerned his own involvement in this area, particularly the relationship, to which the hon. Member for Liverpool, Walton (Mr. Heller) referred, between his position as a member of the Cabinet and as a member of the national executive committee of the Labour Party.
The Minister of State will understand that we do not feel in any way inhibited from making certain comments about the Secretary of State's conduct. We gave him the opportunity to be here. We are bound to express disappointment. It is not the most closely guarded parliamentary secret that the Minister of State is not totally ad idem with the Secretary of State in every positive aspect of Socialist party thought. If we had a free vote, I have no doubt that there are certain aspects of the motion upon which the Minister of State might look more sympathetically than he is able to do.
We shall address ourselves to these issues. My hon. Friend the Member for Gosport has brought before the House one of the most crucial issues affecting our economy at present and for the future. The handling of North Sea oil, as my hon. Friends have said, has undoubtedly been a great success story so far. The allegation by the hon. Member for Aberdeen, North (Mr. Hughes) that we take any pleasure from any failure to succeed is a canard that is hardly deserving of reply. We take great pleasure from

the success so far, but that success was marked in the early stages by considerable enthusiasm and incentive which led to the rapid development of the North Sea oil territories.
As my hon. Friend the Member for Carshalton (Mr. Forman) made clear, there is worrying evidence that the climate has changed and that there is now considerably less enthusiasm and considerably greater concern. I want to address myself to three issues. The first is whether it is really true that the situation has changed. If it is true, why has it happened? If it has happened, does it really matter that the situation has changed? Before answering those questions I should like to deal wit' one comment which I think the Minister of State will make. I hope that he can raise the level of argument above that adopted by the Secretary of State, who dismisses every comment by saying, "There goes the Conservative Party, listening to every tittle-tattle of propaganda from the oil industry. This is just another campaign by the oil industry."
With respect to the Minister of State, we were not born yesterday. The Secretary of State announces to the House as though it is a blinding revelation that the interests of the oil industry and the oil companies are not necessarily identical to the national interest. I should have thought that that was the palpably obvious comment. Of course, they are not. They operate in different disciplines. They have different obligations and commitments, and that is well understood. They are perfectly entitled to run a propaganda campaign. I should have thought that the Secretary of State was the last person to suggest that people should not run propaganda campaigns.
It is the duty of politicians to assess the merit and value of the comments that are made. Some of us who have spent a considerable time in industry and have seen campaigns of this kind before and the way in which they are orchestrated—perhaps this is the difference between our attitude and the attitude shown by the Secretary of State—will actually listen. We will inform ourselves as fully as possible on the issues and we will make our own judgment. What we will not do is make the instant prejudgment that the Secretary of State seems to have made,


that any comment by the oil companies cannot have a grain of truth in it. It is totally prejudicial and not worthy of the attention that should be given to this area.
I hope that we shall hear no more of that canard. We stand for the national interest, which we believe is best secured by harnessing the widest range of skills in the world in the development of the most difficult oil territory yet tackled.

Mr. Heifer: Will the hon. Gentleman give way?

Mr. King: Very briefly.

Mr. Heifer: I gave way to him about four times.

Mr. Macfarlane: No.

Mr. Heifer: I gave way to the hon. Gentleman four times, and the hon. Member for Sutton and Cheam (Mr. Macfarlane) was not in the House at the time.
The hon. Member for Bridgwater (Mr. King) talks about the Secretary of State saying that the statements from the oil companies do not have a grain of truth in them. When did my right hon. Friend say that? Is that not a typical Aunt Sally, put up by the hon. Gentleman only to be knocked down?

Mr. King: If the hon. Gentleman will read the Official Report of the last two sessions of energy Questions he will find ample chapter and verse for my comments.
My first question is: is there a changed climate? The Minister may seek to make out that the sixth round is a great success. It seems that only two-thirds as many companies applied this time as applied before, that one major oil company abstained altogether and that four major companies have made only limited applications. It is difficult to get the full facts because they have not been published yet, and I agree with the suggestion that these applications should be published in full. The Secretary of State made confident boasts in a press release, which appeared to have been issued almost before the closing date for applications, about what a success it was. The resources available to the companies, and the number of companies, must be much smaller.
The Secretary of State misled the House at Question Time last week when he said:
…the sixth round was the most successful round of applications…in terms of…the number of companies that applied ".—[Official Report, 4th December 1978 ; Vol. 959, c. 1019.]
As only two-thirds as many of the companies applied for the sixth round as applied for the fifth, the Minister of State may at least like to correct that.
Anyone who knows the oil industry knows that even that does not tell the whole story about the sixth round, because what will determine it is the work commitment that they are willing to undertake. That may produce some interesting shocks.
I do not want to dwell on the further facts about the change in exploration drilling. In a tripartite exchange with my hon. Friend the Member for Sutton and Cheam (Mr. Macfarlane), the Minister left me thoroughly confused about my having made a selective quotation, when I had quoted the whole of his parliamentary answer. It is hard to be accused of choosing answers selectively.
Although my hon. Friend the Member for Ross and Cromarty covered the three months at the peak of the drilling season, the Minister also gave the figure for the whole year. He has now said that the figure for the whole year is likely to be 59, yet his answer on 4th December gave a figure of 39. If that is not a misprint in Hansard, it is a remarkable change. It represents half the exploration drilling of the year before—a worrying feature.
Lord Kearton said at his press conference in Glasgow that great pressure was needed on the oil companies for virtually every well drilled this year. That does not show evidence of a massive enthusiasm. Tragically, there is a real threat of unemployment among United Kingdom drilling crews. That is a new high in the Government's failure to maintain jobs in an area which should be potentially so exciting for employment.
I have some sympathy with the original statement which was made when the facts about drilling emerged. The Minister of State went on record as saying that he was sure that Government policies were not the cause, although he added that he was not sure what the cause was and then said that he would have further discussions to try to find out.
If we accept that possibly there is not just a propaganda campaign, that perhaps the comments of oil companies may have a grain of truth in them, why has this happened? Of course, there are technical problems. There may be a deterioration in the quality and the geology of the prospects. We may have found the best prospective fields. There is the impact of inflation, as my hon. Friend the Member for Carshalton said, with the enormous expansion of costs. My hon. Friend the Member for Exeter (Mr. Hannam) drew attention to the cost commitments and the risk element which will now face the BNOC. The risk-reward ratio has changed, apart from any taxation considerations.
But the biggest problem is not technical or geological: it is the basic climate of confidence. More than almost any other major industrial area, the North Sea is a world of long-term investments. There is no return on the cash flow for perhaps six, seven or eight years. Only in the twelfth, fifteenth or even the twentieth year does one see a return. The industry's methods of assessment are sophisticated, dealing with all sorts of unknowns, like the world price of oil 10 or 15 years ahead. If one adds political disturbance and economic uncertainty, one sees how damaging that is.
As for the Government's contribution to the uncertainty, one thinks of the tax situation. I do not criticise at this stage, because it is very complicated, the actual levels of tax. I think that the Government have got it wrong, but this will be debated in due course, no doubt on the new Finance Bill, if the Government last that long.
What I criticise is the way that these changes were made. I challenge the Minister to say whether there was any consultation before they were announced. I understand that there was none. The Minister may say that it is not for the Government to consult, that they are free agents, but it was his right hon. Friend the Member for Birkenhead (Mr. Dell) who introduced these tax changes. The right hon. Gentleman said in Standing Committee in 1975 that he hoped that the industry would take a joint assurance from him and my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) that there was no intention that

it should be anything other than "a stable tax". In 1974 he said that the Government's policy would be to avoid frequent changes of the rate but that they would be prepared to review the rate of tax it substantial changes in the situation were to occur.
The Minister of State knows that the only change is that relatively the world price of oil has fallen and that inflation has increased, so that, if anything, the changes have moved adversely against the companies and not in the way envisaged in his right hon. Friend's examples, which was that the rate might be changed if the price went up substantially, increasing the profits of the companies.
What has happpened, therefore, is that the Government feel that they got their sums wrong the first time round after all that exhaustive examination. The Government are entitled to say that. They did not get it wrong because of a change in external factors. They believe that the terms they arranged are not fair to the nation. If, in that situation, the Government are to change the tax climate, it is vital for there to be proper consultation with the oil companies. It is not necessarily the level of taxation that has done the damage. The trouble arises from the feeling in the oil industry that, the Government having done it once, they can do it again and again until it becomes an annual regulator used by the Chancellor of the Exchequer. Over a 20-year investment that is death.

Mr. Gordon Wilson: Does the hon. Gentleman recollect that when the oil taxation Bill came before the House an amendment was put down by myself and my hon. Friends to increase PRT to 75 per cent.? At that time the Financial Secretary to the Treasury indicated that the Government had looked thoroughly at the tax figures and believed that 45 per cent. was correct. I disputed that, and I still disagree with it—I would prefer it to be higher—but one can now see the two standards adopted then, three years ago, and now.

Mr. King: I am sure that the Scottish National Party acts with the benefit of hindsight in all these matters. I do not know what evidence it is drawing on in these matters. The Government were dealing in an area in which they had no previous experience. That is why I accept


that there may be a case for change, but it must be handled with great care if one is not fundamentally to undermine confidence throughout the industry.
This change of tax seems to embody the general hostility so often shown by the Secretary of State to the oil industry in his comments. It has contributed to the lack of confidence. The Secretary of State's quotations and comments at the Labour Party conference have been about as damaging as they could be.
The final question to which I must address myself is whether it matters if there is a lack of confidence. It is worth remembering a statistic which I had not appreciated until quite recently. Half the world oil industry's offshore effort is at the moment concentrated in British waters. There is no sacred God-given reason why that should be. Increasingly we are moving into competition with Brazil, the Baltimore Canyon, Mexico, China, Japan and a number of territories which want oil exploration and the skills and abilities of the oil companies.
The hon. Member for Walton will know what I mean by mobile investment. Here is a classic example of it. The oil industry has the ability to go elsewhere and to take its skills with it. One of the oil companies that showed a significant lack of interest in the sixth round has been quoted as having a keener interest in the Norwegian fourth round. That is what I mean by competition.
It will make no difference to us this year or next year. That is why in some ways the Secretary of State's attitude is so criminal. He is playing here with what is to happen five, six, or seven years ahead when the effects of this policy will be felt. The simple fact is that it is within the international oil industry that the skills and experience lie. Some of those who possess them are British, and others come from other countries. We have to establish a climate which fairly and firmly provides a proper return for the British nation while maintaining an incentive for the international oil industry to find it worth while to keep its skills available for and to harness them to the achievement of British national objectives. That is where the Government are falling down.
The damage that has been done by the Secretary of State through his contribu-

tions to the Labour Party conference cannot be overstated. It is all very well for the hon. Member for Walton to say that the Secretary of State was speaking not as a Cabinet Minister but as a member of the NEC. The right hon. Member for Bristol, South-East (Mr. Benn) is Her Majesty's Secretary of State for Energy, and it is no use his espousing policies at the Labour Party conference, or any other gathering, and expecting oil companies and investors to assume that those policies are just a figment of someone else's imagination in which the right hon. Gentleman has no personal interest.
The biggest damage is that the energy industry and the North Sea are caught up in this appalling power struggle between hon. Members below the Gangway and the NEC on one side and the Labour Cabinet on the other about who fixes Government policy. It is intolerable to suggest that the Secretary of State for Energy can wear one hat on one occasion and speak responsibly, and on another represent only the NEC. The damage was done on the question of nationalisation, whatever that meant, and the hon. Member for Walton told us that it meant retrospective confiscation of licences in the North Sea—

Mr. Heiler: I did not say that.

Mr. King: —or indicated that it could do so

Mr. Heifer: Will the hon. Gentleman give way?

Mr. King: No.

Mr. Heifer: On a point of order, Mr. Deputy Speaker. This is a point of correction. I did not say what the hon. Member for Bridgwater (Mr. King) alleges I said.

Mr. Deputy Speaker (Sir Myer Galpern): Order. I call Mr. King.

Mr. King: I specifically invited the hon. Member—

Mr. Heifer: I did not say that.

Mr. King: I put the point to him—

Mr. Heifer: I did not say that.

Mr. King: Hon. Members will recall that the hon. Member for Walton said that that was a matter—

Mr. Helfer: You are a liar.

Mr. Deputy Speaker: Order. I must ask the hon. Member for Liverpool, Walton (Mr. Heller) to withdraw that observation.

Mr. Heifer: Will the hon. Member for Bridgwater withdraw his statement? I did not say what the hon. Member alleged. If he persists in that allegation —[HON. MEMBERS: "Order."] ft is wrong for an hon. Member to impugn another hon. Member, suggesting that he said something that he did not say. I am prepared to withdraw the word "liar" if the hon. Member for Bridgwater will withdraw his statement.

Mr. Deputy Speaker: I must ask the hon. Member for Walton to withdraw his observation. I hope that he will respect the wish of the Chair. The facts can be discovered in Hansard tomorrow. Will the hon. Member please withdraw?

Mr. Heller: If you so instruct me, Mr. Deputy Speaker, I withdraw it. The hon. Member for Bridgwater should now be good enough to withdraw his statement, because I did not say what he says I did, and he knows that I did not.

Mr. King: If the hon. Member could only contain himself for long enough to listen to the end of a sentence without bellowing like a bull in the middle of it, he would know what I said. I specifically asked him whether the policy could involve the retrospective confiscation of licences. He went off into a long diatribe asking how he could make up policy in advance and saying that it would be necessary to discuss the matter with civil servants. I then intervened again to make clear that that was something that could be envisaged, and it was something that he did not in any way contradict. That is what he said, and if he wishes to check Hansard he will find it there.

Mr. Heifer: I did not say what the hon. Member accused me of saying.

Mr. King: The damage that the hon. Gentleman's statement will do is typical of the sort of damage created by irresponsible statements by Labour Members. They are damaging the whole of our North Sea oil efforts. I should like to say a lot more, and I would but for my promise to allow the Minister of State the maximum time to answer the serious points in the debate.

6.38 p.m.

The Minister of State, Department of Energy (Dr. J. Dickson Mahon): I am glad at last to get into this debate. I thought for a moment that I would not manage it.
There is a lot of good sense in what the hon. Member for Bridgwater (Mr. King) said in his closing remarks on what I regard as part (a) of the motion. The hon. Member for Ross and Cromarty (Mr. Gray) asked about BP. It is true that we decided to retain no more than 51 per cent. of the shares of BP with the uncovenanted situation that arose from the position of Burmah Oil, and so on. However, the shares are held by the Treasury, not by the Department of Energy. They are founded on the old agreement made by that well-known ex-Liberal Winston Churchill, who in about 1910 or 1914, under the so-called Bradbury agreement, entered into an arrangement with the Anglo-Iranian Oil Company.
In view of the point made in part (c) of the motion I thought it right to quote an appropriate section of the speech by Mr. Churchill, as he then was, justifying why a Liberal who became a Conservative wanted to take a 51 per cent. share in an international company. He said:
 it would be much easier and pleasanter for us simply to sit still, and loll with supine ease, while we watched the absorption of every independent oilfield—to sit still and observe the whole world being woven into one or two great combinations—to treat those combinations with the utmost consideration, to buy from hand to mouth in the so-called open market what we wanted from time to time, to pay the great oil trusts what they would consider an encouraging price…It is for Parliament to balance the modern element of fair commercial risk which is inseparable from business enterprise of all kinds, against the certainty of overcharge which follows on monopoly."—[Official Report, 17th June 1914 ; Vol. LXIII, c. 1152–53.]
I regard that pre-Seven Sisters declaration as quite something. The later agreement that came about, the so-called revised Bradbury-Bridges agreement, is the basis of our present relationship with BP. I do not wish to anticipate any debates which we may have quite shortly on the recent relationship between past Prime Ministers, including the right hon. Member for Sidcup (Mr. Heath), who had serious reservations about British Petroleum at a certain time in our national history, or our own connection with the Rhodesian affair.
I think that, having regard to a possible future debate, it is well worth while considering our position in regard to BP. Nobody can say that the position is static and that it can never be resolved. Therefore, I reject part (c) of the motion.

Mr. Tom King: In rejecting that part of the motion, will the right hon. Gentleman say where that places the Chancellor of the Exchequer in his undertakings to Wall Street and American investors?

Dr. Mabon: Precisely where they now are. This House will have to debate our relationships with this great company in the light of the reports which have been discussed, and also in the light of our involvement with the company in other parts of the world. It is important for us to realise that the Labour Government took the option of having to nationalise BP entirely and use it as an instrument in the North Sea, or to create a new company 100 per cent. nationally owned. We took the latter course. We respect the great achievements of BP, particularly in Alaska and many other parts of the world as a most successful British international oil company. But I do not think we can accept part (c) of the motion.
My hon. Friend the Member for Liverpool, Walton (Mr. Heifer) explained part (b) very well. I do not doubt that the convolutions of constitutionalism in the Labour Party are remarkable. Our policy emerges almost as Conservative leaders emerged in the past, namely, by processes that are not understood by our opponents. However, I do not want to comment further on that.
Let me deal with the substance of the motion. I wish to join in congratulating the hon. Member for Gosport (Mr. Viggers) on introducing the motion. The substance lies in part (a) relating to the economic health of the oil province which we are now developing.
There has been a great deal of to-ing and fro-ing in the arguments about the health or otherwise of the present system, but let us at least agree a few markers. First, in regard to PRT, it is the custom for the Chancellor of the Exchequer to propose and for the House of Commons to dispose on any tax changes. It is not the custom in all circumstances for Chancellors of the Exchequer to consult the industry in great detail about taxation

changes. Therefore, when my right hon. Friend the Chief Secretary to the Treasury, on 2nd August, announced the proposed changes in PRT, this was intended to open up discussions with the company. We have no reason to believe so far that the figures we have chosen—and the hon. Member for Dundee, East (Mr. Wilson) will be interested to hear this—are wrong. The hon. Gentleman's comments on this subject were not unreasonable.
We arrived at our decision after due consideration. We have certainly no reason to believe that the figures so far are wrong. We are still willing to listen to representations. However, we are very concerned on the subject of the royalty relief clause, which was touched upon by the hon. Member for Carshalton (Mr. Forman). The hon. Member for Gosport touched on the importance of what he called marginality. We have dealt with the rate of return on these smaller fields whose development so far is in question because of the rate of return. Furthermore, the question of additional taxation has also been seriously considered, as have all the other matters.
When Ministers have conducted consultations and presented their case to the House in the form of a Finance Bill, it is up to us all to debate these matters and to get these rates and circumstances right. Although this may not be the way in which the United States authorities go about these matters, it is the way in which we deal with these subjects in the United Kingdom.
I have tried patiently to explain to the companies that no disrespect is involved in the fact that we announce these changes, discuss them and then allow Parliament to decide whether they should be buttressed. However, I take the point that it is disconcerting to the companies in the case of an investment which may extend over seven to nine years, or perhaps longer, to have to experience changes of that nature. We do not intend to seek changes annually which would make the process somewhat absurd. However, we intend to get the matter right. We do not want the British people to see themselves, in the words of President Carter, ripped off by the great oil companies which have managed to strike a bonanza in the North Sea—a bonanza which not necessarily everybody was able to determine precisely.
Let me deal with the health of the fields. There are 11 fields on stream, with a twelfth field to come on stream this month. The first field began in June 1975. It is remarkable that in three and a half years we have moved from nothing to nearly 12 fields. We have moved from virtually nothing to production of over 1 million barrels a day. Indeed, at the present rate the figure is higher than that.
There are eight fields under development and they all have a forecast startup date. I see no reason why, with perhaps one exception, they should not come on stream on time as at present scheduled. We are appraising three other fields—Magnus, Cormorant North and Maureen. Discussions are taking place with the companies concerned. After that there are five more fields for which development proposals have not yet been submitted.
All of this activity illustrates that the development of the North Sea is going ahead on schedule. However, I take the point that if exploration and appraisal wells are not maintaned at a high figure we cannot expect much more in later years.
The hon. Member for Bridgwater got the situation wrong when speaking at the Conservative Party conference. I know that he was given a great cheer, but he was mistaken. The year 1977 was not our worst year, but our best year.

Mr. Tom King: Why?

Dr. Mabon: Because in that year we saw the end of the fourth round. The figure was 105. The best year had been 1975, with a figure of 116. There are other reasons for that figure.
This illustrates vividly the point made by the hon. Member for Dundee, East. He suggested that the model arrangements in regard to the time taken by companies to explore and appraise wells should be reviewed in the light of experience. That was a fair comment. Companies are given considerable leeway at present, but they gave their answer to us. We do not know the entire answer for the present year because, unlike the hon. Member for Bridgwater, we do not presume to be omnicompeteut. We are modest in our appreciation of events. We are prepared to examine this matter with the companies.
It means that 20 rigs were drilling last year and only 16 this year. That is the extent of the fall-off, which is not quite as dramatic as it sounds. We are discussing the situation with the companies and we had a vigorous comment—the first I have heard from that quarter in three and a half years—from UKOOA that perhaps we had the acreage wrong. The Secretary of State for Energy and I were present at the Energy Commission meeting when that point was made.
The House has never dissented from the argument that there should be small rounds often rather than one large round. However, UKOOA now believes that the acreage is not enough. I do not know to which Conservative I should give the John D. Rockefeller prize for the best anti-Socialist speech of the day, but the oil company concerned, Exxon, has made it clear that although it does not regard the round as attractive geologically, and although it has heavy commitments in the North Sea and does not wish to bid for the sixth round, it is still interested in the future rounds to come. I have been authorised by the chairman, Dr. Pearce. to make that statement tonight.
I am making that statement to the House tonight so that everybody understands that it is not a case of one large company boycotting us. But even if there were such a boycott, that would not be the end of the world for Great Britain. Many young independent British companies are coming into the field and bidding for the first time, hoping to get allocations in this sixth round. Indeed, hon. Members made representations to me about this on the fifth round. They felt that British companies did not get enough—that is, that independent British companies did not get the share of the fifth round which they felt they should have got. It makes it easier for us if the larger companies are not in there bidding. [HON. MEMBERS:" Oh! "] I am appealing to hon. Members' patriotism, obviously without success.
It is not true that Shell has withdrawn. Shell made a bid, and so did Conoco. There can be no suggestion that the companies are running away to more attractive parts of the world. The North Sea still represents a politically stable and financially secure oil province in the world. The proof of that is the hon. Gentleman's confession that half of all


the investment in the world at the moment in offshore activity is in the North Sea province.
I take it that hon. Gentlemen are arguing not so much on the motion tonight—that is, on the present picture—but rather on what they fear the picture might be. They have proved nothing. They have not proved that anybody has deserted the North Sea, they have not proved that investment has fallen off or that there have been bankruptcies all round. They have proved nothing more than that there has been a marginal falloff in appraisal and exploration drilling. That is all. I regret that as much as anyone else does.
There were 71 blocks or part-blocks in the fifth round and 133 applicant companies. There are 44 blocks this time and 94 companies. "Never mind the quality, feel the width." It is fair to say that it depends on what one is talking about. I realise that hon. Members cannot make an assessment because these matters are confidential to the Government. The companies would not want it otherwise. If they do, they should tell us, but at the moment they do not.
My right hon. Friend the Secretary of State has given in Hansard, in answer, I believe, to my hon. Friend the Member for Dunbartonshire, West (Mr. Campbell), a list of the companies which are involved to show the House of Commons and the world that the British oil province still remains the most attractive area for investment in the oil industry, and I call upon my right hon. and hon. Friends to reject the motion.

6.54 p.m.

Mr. Viggers: I remind the House of these words:
 Is there any point to which you would wish to draw my attention? 
said Dr. Watson.
 To the curious incident of the dog in the night-time 
said Sherlock Holmes.
 But ",
said Dr. Watson,
 the dog did nothing in the night-time. That was the curious incident ",
remarked Sherlock Holmes.
The curious feature of this debate is that two of the three sections of the motion relate to the Secretary of State for Energy, who has come into the Chamber

in the last few minutes. The curious thing about the whole debate is that he has done nothing during the debate. It is quite extraordinary.
We have had two replies from the Government side. One came from the Minister of State, Department of Energy, who tried to explain away the reasons why the Government feel unable to accept the motion. The other reply was from the hon. Member for Liverpool Walton, (Mr. Heller), and I think it is worth reminding the House that he was at one time a Minister of State working for and with the present Secretary of State for Energy, so there is reason to believe that his reply might be as authentic as that of the present Minister of State, Department of Energy.
The reply by the hon. Member for Walton was frightening in its clarity. The hon. Gentleman made clear exactly how he felt the Labour Party would deal with North Sea oil development, and that prospect is daunting. I shall not bring the hon. Gentleman to his feet again in anger, as he was a few minutes ago in response to my hon. Friend the Member for Bridgwater (Mr. King), to say whether or not he intends—

Mr. Heffer: Repeat what the hon. Member for Bridgwater (Mr. King) said, and I will.

Mr. Viggers: No doubt, I shall persuade the hon. Gentleman to his feet in due course. The prospect that he laid before us was one of further nationalisation in the North Sea.
I come now to the reasonable remarks made by the right hon. Member for Orkney and Shetland (Mr. Grimond). I so often agree with him that I find it difficult to believe that he is in a different party. He said that it is difficult to imagine what else is left to nationalise in the North Sea since North Sea oil has already been nationalised by a Conservative Government. But the right hon. Gentleman asked for an assurance that no further oil companies would be nationalised and for an assurance that oil terminals would similarly be left alone.
The Minister of State did not reply to that question. I think that we probably received a more authentic reply from the hon. Member for Walton, the ex-Minister of State.
The right hon. Member for Orkney and Shetland asked also for an assurance on the flaring of gas at Flotta, and he asked whether this could be used at Sullom Voe. The Minister did not comment on that. Nor, indeed, did he explain why the antipollution centre should be based at Bristol, conveniently adjacent for dealing with pollution problems in Bristol, South-East and other constituencies, when it should be nearer to Sullom Voe.
The right hon. Member for Orkney and Shetland referred quite rightly to the vexed question of who is the referee in the North Sea. It is not good enough to have a company which is both referee and player.
The hon. Member for Walton tried to clarify what he thought was meant by complete public ownership of oil resources. He was dealt with quite adequately by my hon. Friend the Member for Bridgwater. He did not, however, deal with what was meant by "nation" when the Secretary of State for Energy made that reference at the Labour Party conference. That remains outstanding. He also objected to my use of the expression "silly" concerning the resolution at the Labour Party conference. I did not say that; it was The Times that said it. But it was indeed silly, and I confirm that The Times was right.
At the outset of the speech by my hon. Friend the Member for Carshalton (Mr. Forman) it became apparent that the Secretary of State was absent on Cabinet business and unable to attend the Chamber. We were told that that business concerned the subject of our debate. It is certainly a new rule which says that Cabinet Ministers may have their absence explained by their deputies during a debate relating to them specifically and personally because they are busy elsewhere. This is an excuse which could perhaps be used by many other people.
The hon. Member for Dundee, East (Mr. Wilson), who is in his place, speak-

ing for the Scottish National Party, reiterated my request that there should be publication of a list of blocks and applications. This is perhaps something the Minister might wish to look at.

I shall not go into the speech of the hon. Member for Aberdeen, North (Mr. Hughes), which has been taken to bits on a number of occasions in the last hour or two. One point, however, is worth making. The hon. Gentleman sought to say that the Conservative Party had cost the country many millions of pounds by giving oil away cheaply. The most valuable oilfield in the North Sea is the Forties, which is owned and operated by British Petroleum. That allocation was made by a Labour Government—a fact which is often overlooked.

My hon. Friend the Member for Exeter (Mr. Hannam) pointed out that BNOC has not added a single drop of oil to North Sea production. It is a fact that BNOC has not contributed anything apart from nationalisation of the operations.

The motion which I put down for debate, discussion and vote this evening could not be more moderate. Part (c) simply asks for clarification of the Government's intentions with regard to British Petroleum in the light of the remarks of the Secretary of State for Energy at the Labour Party conference. I understand that the Minister of State is not prepared to accept that, and 11; urges his hon. Friends to vote against it. It is difficult to understand why. Part (b) asks the Government to end the uncertainty caused by the Secretary of State for Energy's approval of nationalisation of North Sea oil. That also has been refused. Part (a) asks for an improvement in the economic climate. That is refused as well. I ask my right hon. and hon. Friends to support the motion.

Question put:—

The House divided: Ayes 159, Noes 197.

Division No. 20]
[6.59 p.m
AYES


Altken, Jonathan
Bitten, John
Brittan, Leon


Alison, Michael
Biggs-Davison, John
Brooke, Hon Peter


Atkins, Rt Hon H. (Speithome)
Blaker, Peter
Buck, Antony


Atkinson, David (B'mouth, East)
Boscawen, Han Robert
Budgen, Nick


Baker, Kenneth
Bottomley, Peter
Bulmer, Esmond


Banks, Robert
Bowden, A. (Brighton, Kemptown)
Butler, Adam (Bosworth)


Bell, Ronald
Boyson, Dr Rhodes (Brent)
Channon, Paul


Berry, Hon Anthony
Brains, Sir Bernard
Clark, Alan (Plymouth, Sutton)




Clarke, Kenneth (Rushcliffe)
Jones, Arthur (Daventry)
Paisley, Rev Ian


Cope, John
Kershaw, Anthony
Parkinson, Cecil


Cormack, Patrick
Kilfedder, James
Pattie, Geoffrey


Craig, Rt Hon W. (Belfast E)
Kimball, Marcus
Percival, Ian


Crowder, F. P.
King, Tom (Bridgwater)
Powell, Rt Hon J. Enoch


Dodsworth, Geoffrey
Knight, Mrs Jill
Price, David (Eastleigh)


Douglas-Hamilton, Lord James
Lawson, Nigel
Prior, Rt Hon James


Drayson, Burnaby
Le Marchant, Spencer
Pym, Rt Hon Francis


du Cann, Rt Hon Edward
Lewis, Kenneth (Rutland)
Raison, Timothy


Dunlop, John
Loveridge, John
Rees, Peter (Dover &amp; Deal)


Durant, Tony
McCrindle, Robert
Renton, Rt Hon Sir D. (Hunts)


Dykes, Hugh
McCusker, H.
Renton, Tim (Mid-Sussex)


Eden, Rt Hon Sir John
Macfarlane, Neb
Ridley, Hon Nicholas


Edwards, Nicholas (Pembroke)
MacGregor, John
Roberts, Michael (Cardiff NW)


Emery, Peter
MacKay, Andrew (Stechford)
Roberts, Wyn (Conway)


Eyre, Reginald
McNair-Wilson, M. (Newbury)
Royle, Sir Anthony


Fairgrieve, Russell
McNair-Wilson, P. (New Forest)
Sainsbury, Tim


Farr, John
Marshall, Michael (Arundel)
Scott, Nicholas


Fisher, Sir Nigel
Marten, Neil
Shaw, Giles (Pudsey)


Fletcher, Alex (Edinburgh N)
Mates, Michael
Sims, Roger


Fowler, Norman (Sutton C'I'd)
Mather, Carol
Smith, Dudley (Warwick)


Fox, Marcus
Maudling, Rt Hon Reginald
Smith, Timothy John (Ashfield)


Fry, Peter
Maxwell-Hyslop, Robin
Spicer, Michael (S Worcester)


Galbraith, Hon T. G. D.
Mayhew, Patrick
Stanbrook, Ivor


Gardner, Edward (S Fylde)
Meyer, Sir Anthony
Stanley, John


Gilmour, Rt Hon Sir Ian (Chesham)
Miller, Hal (Bromsgrove)
Stewart, Ian (Hitchin)


Glyn, Dr Alan
Mills, Peter
Stradling Thomas, J.


Goodhart, Philip
Miscampbell, Norman
Tapsell, Peter


Gorst, John
Mitchell, David (Basingstoke)
Taylor, R. (Croydon NW)


Gray, Hamish
Moate, Roger
Tebbit, Norman


Grieve, Percy
Molyneaux. James
Thatcher, Rt Hon Margaret


Grimond, Rt Hon J.
Montgomery, Fergus
Townsend, Cyril D.


Hamilton, Archibald (Epsom &amp; Ewell)
Moore, John (Croydon C)
van Straubenzee, W. R.


Hamilton, Michael (Salisbury)
More, Jasper (Ludlow)
Vaughan, Dr Gerard


Hannam, John
Morgan-Giles, Rear-Admiral
Wakeham, John


Hastings, Stephen
Morris, Michael (Northampton S)
Walker, Rt Hon P. (Worcester)


Hayhoe, Barney
Morrison, Hon Peter (Chester)
Whitelaw, Rt Hon William


Health, Rt Hon Edward
Neave, Airey
Wiggin, Jerry


Higgins, Terence L.
Nelson, Anthony
Wigley, Dafydd


Hodgson, Robin
Neubert, Michael
Winterton, Nicholas


Hordern, Peter
Newton, Tony
Wood, Rt Hon Richard


Howe, Rt Hon Sir Geoffrey
Normanton, Tom
Young, Sir G. (Ealing, Acton)


Howell, David (Guildford)
Nott, John



Hunt, David (Wirral)
Page, John (Harrow West)
TELLERS FOR THE AYES:


Hunt, John (Ravensbourne)
Page, Rt Hon R. Graham (Crosby)
Mr. Peter Viggers and


Hurd, Douglas
Page, Richard (Workington)
Mr. Nigel Forman.


Jenkin, Rt Hon P. (Wanst'd&amp;W'df'd)






NOES


Abse, Leo
Cook, Robin F. (Edin C)
Grocott, Bruce


Allaun, Frank
Cowans, Harry
Hamilton, James (Bothwell)


Anderson, Donald
Cox, Thomas (Tooting)
Hardy, Peter


Archer, Rt Hon Peter
Craigen, Jim (Maryhill)
Hayman, Mrs Helene


Armstrong, Ernest
Crawshaw, Richard
Heffer, Eric S.


Atkins, Ronald (Preston N)
Crowther, Stan (Rotherham)
Home Robertson, John


Bagier, Gordon A. T.
Cryer, Bob
Horam, John


Barnett, Guy (Greenwich)
Cunningham, Dr J. (Whiten)
Howell, Rt Hon Denis (B'ham, Sm H)


Barnett, Rt Hon Joel (Heywood)
Davies, Bryan (Enfield N)
Hoyle, Doug (Nelson)


Bates, Alf
Davies, Rt Hon Denzil
Hunter, Adam


Bean, R. E.
Davis, Clinton (Hackney C)
Irving, Rt Hon S. (Dartford)


Benn, Rt Hon Anthony Wedgwood
Deakins, Eric
Jackson, Colin (Brighouse)


Bennett, Andrew (Stockport N)
Dean, Joseph (Leeds West)
Jackson, Miss Margaret (Lincoln)


Bidwell, Sydney
Doig, Peter
Jay, Rt Hon Douglas


Bishop, Rt Hon Edward
Dormand, J. D.
Jenkins, Hugh (Putney)


Blenkinsop, Arthur
Douglas-Mann, Bruce
John, Brynmor


Booth, Rt Hon Albert
Duffy, A. E. P.
Johnson, James (Hull West)


Boothroyd, Miss Betty
Edge, Geoff
Johnson, Walter (Derby S)


Bottomley, Rt Hon Arthur
Ellis, John (Brigg &amp; Scun)
Jones, Alec (Rhondda)


Boyden, James (Bish Auck)
English, Michael
Jones, Barry (East Flint)


Bray, Dr Jeremy
Ennals, Rt Hon David
Judd, Frank


Brown, Hugh D. (Provan)
Evans, loan (Aberdare)
Kaufman, Rt Hon Gerald


Brown, Robert C. (Newcastle W)
Evans, John (Newton)
Kerr, Russell


Buchan, Norman
Ewing, Harry (Stirling)
Kilroy-Silk, Robert


Callaghan, Rt Hon J. (Cardiff SE)
Faulds, Andrew
Kinnock, Neil


Callaghan, Jim (Middleton &amp; P)
Fernyhough, Rt Hon E.
Lamond, James


Campbell, Ian
Flannery, Martin
Lee, John


Canavan, Dennis
Foot, Rt Hon Michael
Lestor, Miss Joan (Eton &amp; Slough}


Carmichael, Neil
Fraser, John (Lambeth, N'w'd}
Lewis, Ron (Carlisle)


Carter, Ray
Garrett, John (Norwich S)
Mabon, Rt Hon Dr J. Dickson


Carter-Jones, Lewis
Gilbert, Rt Hon Dr John
McElhone, Frank


Cartwright, John
Ginsburg, David
MacFarquhar, Roderick


Cocks, Rt Hon Michael (Bristol S)
Golding, John
McKay, Alan (Penistone)


Cohen, Stanley
Graham, Ted
MacKenzie, Rt Hon Gregor


Coleman, Donald
Grant, John (Islington C)
Maclennan, Robert







McMillan, Tom (Glasgow C)
Roberts Albert (Normanton)
Thomas, Ron (Bristol NW)


Madden, Max
Robertson, George (Hamilton)
Thorne, Stan (Preston South)


Marks, Kenneth
Rodgers, George (Chorley)
Tilley, John


Marshall, Jim (Leicester S)
Rodgers, Rt Hon William (Stockton)
Tinn, James


Maynard, Miss Joan
Rooker, J. W.
Tomlinson, John


Meacner, Michael
Roper, John
Torney, Tom


Mellish, Rt. Hon Robert
Rowlands, Ted
Urwin, T. W.


Mtkardo, Ian
Ryman, John
Varley, Rt Hon Eric G.


Milian, Rt Hon Robert
Sandelson, Neville
Wainwright, Edwin (Dearne V)


Mitchell, Austin (Grimsby)
Sedgemore, Brian
Walker, Harold (Doncaster)


Morris, Rt Hon Charles R
Selby, Harry
Walker, Terry (Kingswood)


Morton, George
Shaw, Arnold (Ilford South)
Ward, Michael


Mulley, Rt Hon Frederick
Sheldon, Rt Hon Robert
Watkins, David


Murray, Rt Hon Ronald King
Shore, Rt Hon Peter
Watkinson, John


Noble, Mike
Short, Mrs Renee (Wolv NE)
Weetch, Ken


Oakes, Gordon
Silkin, Rt Hon John (Deptford)
Wellbeloved, James


Ogden, Eric
Silkin, Rt Hon S. C. (Dulwich)
White, James (Pollok)


O'Halloran, Michael
Silverman, Julius
Whitehead, Philip


Orbach, Maurice
Skinner, Dennis
Whitlock, William


Orme, Rt Hon Stanley
Smith, Rt Hon John (N Lanarkshire)
Williams, Rt Hon Allan (Swansea W)


Owen, Rt Hon Dr David
Snape, Peter
Williams, Alan Lee (Hornch'ch)


Palmer, Arthur
Spearing, Nigel
Williams, Rt Hon Shirley (Hertford)


Park, George
Spriggs, Leslie
Williams, Sir Thomas (Warrington)


Parker, John
Stallard, A. W.
Wilson, William (Coventry SE)


Parry, Robert
Stewart, Rt Hon M. (Fulham)
Wise, Mrs Audrey


Pavitt, Laurie
Stoddart, David
Woodall, Alec


Pendry, Tom
Stott, Roger
Wrigglesworth, Ian


Price, C. (Lewisham W)
Strang, Gavin
Young, David (Bolton E)


Price, Willam (Rugby)
Summerskill, Hon Dr Shirley



Radice, Giles
Taylor, Mrs Ann (Bollon W)
TELLERS FOR THE NOES:


Rees, Rt Hon Merlyn (Leeds S)
Thomas, Jeffrey (Abertillery)
Mr. Robert Hughes and


Richardson, Miss Jo
Thomas, Mike (Newcastle E)
Mr. Ernest G. Perry.


Question accordingly negatived.

NORTHERN IRELAND (APPROPRIATION)

7.12 p.m.

The Under-Secretary of State for Northern Ireland (Mr. Ray Carter): I beg to move,
That the draft Appropriation (No. 4) (Northern Ireland) Order 1978, which was laid before this House on 23d November, be approved.
The order will be made under paragraph 1 of schedule 1 to the Northern Ireland Act 1974.
The Main Estimates of Northern Ireland Departments for 1978–79 amounted to £1,299 million and were appropriated by the Appropriation (Northern Ireland) Order 1978 and the Appropriation (No. 2) (Northern Ireland) Order 1978, which were approved by the House on 6th March and 7th July respectively. A summer Supplementary Estimate for £33 million was embodied in the Appropriation (No. 3) (Northern Ireland) Order 1978 and approved by the House on 17th July.
The main purpose of the draft order is to authorise the issue out of the Northern Ireland Consolidated Fund of a further £129 million and its appropriation for the purposes indicated in the autumn Supplementary Estimates. The making of the order would bring the total provision to date for 1978–79 for expenditure by Northern Ireland Departments to £1,461 million, some £143 million above the total Estimates provision for 1977–78. The cash limited element of the 1978–79 figure is within the Northern Ireland approved cash limit. The sum being sought is also within the approved public expenditure survey allocations for Northern Ireland Departments.
The order also repeals earlier appropriation enactments, and these are detailed in the second schedule to the order.
The services for which additional funds are being sought are set out in the first schedule to the order and more detailed information may be found in the autumn supplementary estimates, copies of which are available in the Library to right hon. and hon. Members. I should like to draw the attention of the House to the main items in the order.

Mr. J. Enoch Powell: The Minister referred to the repeals in the second schedule. May we take it that these repeals are taking place merely because the full effect of the orders is spent and that all the sums that the orders allocated have been consumed? Is it simply that these are spent orders, or is there any other significance in the repeals?

Mr. Carter: It is my understanding that this is a consolidation measure and that the one measure replaces all the previous items to which the right hon. Gentleman has referred. However, in summing up, I shall give him a definitive statement.
The House will recall that in the Appropriation (No. 3) (Northern Ireland) Order 1978 a token provision of £1 million was made for expenditure on a scheme to aid milk producers. The ending of the former milk guarantee scheme has made this new scheme necessary. To supplement the existing token provision, some £11 million is now being sought in class I, vote 3.
A further £43 million is being sought in class II vote 1 for industrial support and regeneration, bringing the overall total under this Vote for 1978–79 to £112 million. Most of this extra provision will be disbursed in the form of industrial development assistance to new companies which are being established in Northern Ireland and to existing companies. Financial assistance to the Northern Ireland Development Agency is to be increased by £6 million. The Government regard the increased requirements for these services as an encouraging sign that industrial investment in Northern Ireland may be on the upturn.
Class II, vote 5, which provides for the functioning of the labour market, shows an additional requirement of £11 million. The temporary employment subsidy has been extended to 31st March 1979 and the temporary short-time working compensation scheme has recently been introduced. It is estimated that an additional £6 million will be needed to fund these measures alone. Further sums are also being sought for training by employers, Enterprise Ulster and the youth opportunities programme. This reflects the Chancellor of the Exchequer's announcement in his Budget Speech of additional funding for measures aimed


at reducing unemployment, particularly among young people.
A further £19 million will be needed in 1978–79 for schools—Class VIII, Vote 1. Almost £10 million of this is accounted for by the pay award to teachers from 1st April 1978. The remaining £9 million arises from the decision to do away with the concept of grammar school scholarships. Grants are now made direct to voluntary grammar schools by the Department of Education. There will be offsetting savings on the scholarships formerly paid by the education and library boards.
In Class IX, Vote 1, £9 million out of the £14 million sought is required to cover agreed pay awards for staff employed by the health and social services boards. A further £3 million arises mainly from various measures taken to alleviate unemployment.
In Class X, Vote 2, an increase of £12 million is being asked for, £11 million of it being for supplementary benefits. An extra £8 million is required for family benefits, in Vote 3, due almost entirely to the Government's decision to raise the child benefit allowances from 14th November 1978.
These are the principal features of the order to which I draw attention. I shall, of course, try to answer any questions which right hon. and hon. Members may raise during the debate, and if for any reason I am unable to do so I will note the point and write to the right hon. or hon. Member concerned.

I commend the order to the House.

7.18 p.m.

Mr. Airey Neave: We agree that the expenditure is necessary. However, these are substantial Estimates and I shall refer to expenditure under certain classes, especially Classes II and VIII; assistance to industry and expenditure by the Department of Education.
On 7th December 1978, at Question Time, I asked about orders for Harland and Wolff and diversification of production in that company. The Minister will remember that I expressed regret at the absence of defence orders. I do not think that the firm has received a defence order for some years. In reply, the Minister of State said that, although 400 jobs had

been saved as a result of diversification, there were
 not many defence contracts going around any of the shipyards."—[[Official Report, 7th December 1978; Vol. 959, c. 1610.]
Two days later, I read in the press that the assault ship "Fearless" and the cruiser "Kent" were due for refitting. It appears that there has been an industrial dispute at Portsmouth dockyard, according to this press report, affecting the naval refitting programme. As a result, tenders have been invited for refitting from commercial yards. Will the Minister, when he replies, comment on this in regard to Harland and Wolff? Will he confirm that "Fearless" was built by Harland and Wolff and that the company is equipped to overhaul it? Could not the company, therefore, be favourably considered for this work? The same point applies to the cruiser "Kent", which is to be refitted by contract at Wallsend on Tyne. I do not suppose that that arrangement can be altered, but it is regrettable that it should not go to Harland and Wolff, as I believe that the company also built this ship. Will the Minister confirm those statements when he replies? It is quite an important matter, and people would like to know about it.
I next refer to the last Appropriation debate, which took place on 7th July 1978, and to Question Time on 13th July 1978, when I raised the question of the need for an economic plan for the Province. The preparation of a plan is referred to by the Northern Ireland Economic Council in its recent report. the annual statement of work 1977–78, at paragraph 10.
On 7th July, I asked about the nature of this new plan, since I supposed at that time that the Secretary of State was relying on the Quigley report of 1976, which the House has never debated. The Secretary of State wrote to me on 31st July 1978, stating that the council was not referring to Quigley but to work by the Economic Strategy Group in Belfast.
I hope that we can have a little more clarification about these matters this evening. The House has very little idea of the Government's general strategy thinking about the development of the Northern Ireland economy. If the new plan is treated with the same degree of secrecy as the Quigley plan, the position will remain very much the same. There are


certainly few signs at present that the Government are preparing to revise their position. I should like to see the Northern Ireland Economic Council acting rather more publicly and openly, in the manner of the equivalent body in England, the National Economic Development Council, stimulating debate and discussion among interested parties.
It would be helpful if the Secretary of States would publish in full such advice as he receives from the council, so that the progress of the new economic plan can be properly assessed. I thought it was a pity when he told me, in the letter of 31st July to which I have referred, that he would not be publishing the report by the Council on Agriculture. I do not know the reason for it, but it is a pity, because the council has made it clear that it wishes to play a full part in the preparation of any plan or strategy for the Province. Perhaps the Minister will deal with those points when he replies.
I now turn to the subject of job creation, which was mentioned by the Minister in his opening speech. The Northern Ireland Economic Council, in its annual report, stated in paragraph 20 that
 the present rate of job creation still falls far short of the level which will be needed to have any significant effect on the core problem of unemployment.
From 1972 until last year, the number of new jobs created in Northern Ireland had declined. When the Minister of State answered a Question on the subject on 13th July 1978, at column 1707 of the Official Report, he gave the impression that the tide had definitely turned. He stated that 1,200 jobs had been promoted in companies new to Northern Ireland in the first half of this year as compared with a half-yearly average of 225 between 1972 and 1977.
I should like to hear a little more about this. While it remains true that unemployment has only recently begun to fall within the Province after a sharp rise, contradiction in the private sector has been offset by expansion in the public sector. There remains an acute need for the provision of a large number of additional jobs in the private sector with sound long-term prospects.
The Minister referred to the Northern Ireland Development Agency. We hope that the increase in the financial limit of

£50 million, which the Secretary of State announced for the Agency last Friday, will make a major contribution in this field. Will the Minister, when he replies, say whether it will be the subject of a further order, and whether there will be a statement or a debate on the matter?
I know that the Northern Ireland Office is fully aware of the difficulties which are encountered by those seeking to attract industries to Northern Ireland because of the tax system of the Republic and its tax holiday on exports. I understand that discussions have been held with the European Commission on this point. Will the Minister make a statement about the likelihood of securing changes to end the disadvantage which Northern Ireland suffers at present in that regard? Is Northern Ireland extracting the maximum from the package of incentives introduced last year by the Secretary of State? I am sure that the House would like to hear about those matters.
I turn fairly briefly to Class VIII, education. We discussed this rather fully in July but I should like to ask for some further clarification of the Government's policy for Northern Ireland. Secondary education in Northern Ireland is very good, and the system provides for more parental choice, in my view, than the English system does.
On 2nd October 1978 I received a letter from the Department of Education and Science, written on behalf of the noble Lord Lord Melchett, which stated that, while the Government are committed to the abolition of selection at 11-plus, they have no intention of imposing a uniform organisation of secondary education on all areas. They had given responsibility for local planning to eliminate selection to the area boards, and they relied on the co-operation and good will of all concerned.
In view of what we have been discussing in the past, that statement is very important, but none the less it needs some examination. Probably what the noble Lord means is that he is not intending to impose a system by law. I think that we are all aware in this House that there is no law which obliges controlled or voluntary schools in Northern Ireland to change to comprehensive. Equally, it is not unlawful for the noble Lord to attempt to persuade them to do so, and I have never said that it was. But the


Education Act 1976 does not apply to Northern Ireland, and consequently the Secretary of State has no power to demand proposals from local authorities, nor have they a duty to reply. I hope that the Minister will confirm that that is the law.
The importance of what I am saying can be seen in regard to the quotas which, through the area boards, the noble Lord set for some of the secondary schools, mainly the grammar schools, last year. Under his so-called "revised transfer procedure ", he proposes to set new quotas for the coming year of entrants.
The Government, under the Education Bill dealing with England and Wales, are proposing a scheme for "planned admission limits" under which the intake number for each school is set year by year. The Conservative Opposition spokesman for education, my hon. and learned Friend the Member for Runcorn (Mr. Carlisle), on the Second Reading of the Bill, criticised these proposals on the ground that they interfered with parental choice and a number of other matters.
What is the relationship, if any, between the quotas which the noble Lord is setting in Northern Ireland for entry to schools and the system which appears in the Education Bill, described as "planned admission limits "? We would certainly criticise that system. If the system is meant to apply to Northern Ireland, it should be pointed out that the Minister, as he will know, cannot set quotas for schools against parental wishes, and it would be highly unpopular if he were to do so. In Londonderry last year, having set quotas, the Government had to climb down in the face of parental protest and let a few more children into schools of their choice, exceeding the original set quotas. I know that the Minister has recently visited Londonderry on this very question. Do the quotas have any basis in law, and what is the authority for imposing them? That is an important point, and the House would like to know about it. It is one on which both communities are agreed and united. They agree that quotas are not popular and they are not a satisfactory system.
I should like to make two further points before sitting down. I know that Nor-

thern Ireland Members wish to raise other questions.
Lord Melchett has set up working parties on education. I should like to ask one or two questions and be assured about certain matters. Are the working parties working to clear terms of reference? Are they clearly independent of Government advice or persuasion? It would be better if they were. Will they make a full report on completion of their work without necessarily making interim reports? I think that the public should know the contents of those reports. We want parents to understand the Government's purposes.
I repeat what I have said on several occasions about education in Northern Ireland—namely, leave the good schools alone and let them prosper. The Government sometimes do not realise the strength of feeling on education in the Provinuce. It unites the two communities perhaps more than any other aspect.
If the noble Lords wants to do something constructive about education in Northern Ireland, I make four useful suggestions. First, there should be no change of schools, except in accordance with local wishes. Secondly, there should be renewal and vitalisation only of those secondary intermediate schools which really need it. Thirdly, we should inject greater technical training into some of those schools. Indeed, we should convert some of the secondary intermediates, not to comprehensives, but to technical schools. The noble Lord said that he did not want a uniform system, though I take that to mean that he wants all schools ultimately to go comprehensive. But some of these schools could become technical rather than comprehensive schools.
Finally, the noble Lord should respond to parental choice. He should not continue the quota system without full justification to the House. There should be an increase in school places in areas where there are now deficiencies. I believe that is true of Belfast and other areas. Those are all the points that I want to make on education.
The Opposition, like Northern Ireland Members, are concerned about energy policy for the Province. My hon. Friend the Member for Beckenham (Mr. Good-hart) will refer to that matter in replying


for the Opposition. Having made those points, I should be grateful for an answer in the Minister's reply.

7.33 p.m.

Mr. Harold McCusker: Under Class II, Vote 4, my colleagues and I wish to raise problems concerning the future of energy policy in the Province. I have been asked to speak about the gas industry.
It is almost two years since we first debated the future of the gas industry. At regular intervals since then we have been assured that, within weeks, the Minister would tell us that the Government had reached a decision one way or the other. Of course, after those weeks elapsed we heard the same story and a few weeks later we heard it again. Last week, during Northern Ireland Questions, the Minister told us that he would give us in early January the Government's decision on the future of the gas industry. I hope that in early January we shall not be told again that we must wait for another two or three months for that decision.
During the intervening two years the industry has slithered closer and closer to the brink of destruction. It is now much weaker than it was two years ago. It has lost consumers. With the uncertainty and debt growing like an albatross around the necks of the various undertakings, we are getting to the stage where a number of the concerns are close to the point where rescue operations will be of no avail.
I do not need to draw the Minister's attention to headlines in local and national papers in Northern Ireland expressing the anger and concern not only by individual consumers but of local councils and other bodies at the imposition of the 10 per cent. increase on the price of gas. I appreciate that very good arguments can be put forward by the Minister and his officials to justify the 10 per cent. increase. However, if we are to believe the Minister, we are within three or four weeks of being made aware of the Government's vital decision. Surely, therefore, it would not have been too much to ask that the increase be held back until we knew what was to happen.
During this period we have suggested —and the 13 various undertakings agree with us—that immediate steps should be taken to unify the industry and make it

into one cohesive unit. We have argued that if there is to be a future for the industry that will be necessary anyway and that we might have used the time to do that If there is to be no future for the industry, it will be easier and cleaner to kill it off if it is one unified industry rather than 13 individual undertakings. I hope that the Minister will indicate the Government's thinking on the whole issue of a unified gas industry in the Province.
Some people might ask "What are people in Northern Ireland moaning about? What extra are they asking for again? Have they any good argument when they complain about the price of gas?" The Government conceal the situation by saying that the price of gas in Northern Ireland compares favourably with the price of oil, electricity or coal. We repudiate the suggestion that the price of gas in Northern Ireland should be compared only with the price of other fuels. We contend that the price of gas in Northern Ireland must be looked at in the context of the price of gas in the United Kingdom. Those who think that there is no problem may think otherwise when I give certain figures.
A gas consumer in London tonight is paying 18·5p per therm for the gas that he uses. A gas consumer in Belfast tonight is paying 46·6p per therm for the gas that he uses. The consumer in Belfast is paying almost three times as much as the consumer in London. An industrial concern in London pays less than 10p per therm. An industrial concern in Belfast pays 31p per therm. The commercial tariff is 16p per therm in London and 46·9p per therm in Belfast. We suggest that there can be no justice in Northern Ireland until those lower prices are offered to gas consumers in the Province.
When pushed, the Minister gave as a reason for delay:
 However, every move that I made seemed to bring me up against another brick wall."—[Official Report 7th December 1978; Vol. 959, c. 1611.]
He said that he hoped to make a rapid decision but that every time that it appeared that he would be in a position to make a decision he came up against a brick wall. If he has come up against a brick wall in dealing either with his colleagues or with the Treasury, it is because they are not prepared to look


beyond the Province. They want to contain the problem within the boundaries of Northern Ireland. Each decision seems to be made in the context of Northern Ireland, not of the United Kingdom.
For example, why should the Kilroot power station, which is a big factor in the decision on the future of gas, be considered a Northern Ireland liability or asset any more than the Drax power station should be considered a Yorkshire liability or asset? If they are assets or liabilities, they are United Kingdom assets or liabilities.
We have heard hon. Members say "But you cannot get gas at the price that we have it on the mainland. After all, you have other things over there which will do instead." If the Minister of State were here, I should suggest to him that, in his own words, there is a surplus of energy in Yorkshire as well as in Northern Ireland. There is a surplus of coal in Yorkshire. But no one suggests that Yorkshire cannot have natural gas. Yorkshire is exporting coal.
If we have an excess of energy in Northern Ireland, we should adopt the same attitude. We could export our surplus electricity to our profit. We have done it in the past. We have sold millions of pounds worth of electricity to the Republic. According to news emanating from the Republic, there have already been massive power cuts there this winter. I am quite certain that the Republic cannot look too confidently to the remainder of the winter without envisaging many more. If we had that standby capacity in Northern Ireland, ready to sell into the Republic, I am quite sure that during the next three or four months we could make many millions of pounds which would be to the advantage of the Northern Ireland electricity industry and its consumers. Indeed, there may well be advantages for the electricity industry and its consumers in the South. No one objects to our buying store cattle from the Republic. That business has gone on for generations. I therefore hope that no one will object to the suggestion that we should sell electricity to the Republic if we have the extra capacity.
Our case is worth repeating. It is simply that Northern Ireland is part of the United Kingdom, that United Kingdom

assets are Northern Ireland assets, and that we are entitled to a share of the national resources of this country. The Northern Ireland Economic Council had no problems in coming to that conclusion. If the Minister will not accept the case from me, perhaps he will accept it from the council. Paragraph 32 of the council's" Recommendations on Energy Policy in Northern Ireland "stated:
 The prospect of securing the future of the gas industry in Northern Ireland is therefore closely linked to gaining acceptance of the proposition that the fuel resources of the North Sea are national assets, to the benefits of which all parts of the United Kingdom have title. The pursuit of this proposition is essentially a political consideration; but it seems to Council that for this purpose the United Kingdom should be regarded as a unit. We have noted that areas of the United Kingdom as remote as Northern Ireland from the North Sea sources have received supplies of natural gas as of right. We note also that the financial position of the British Gas Corporation is extremely healthy, and that recent statements (e.g. in the Green Paper on Energy Policy) give grounds for expecting that supplies of North Sea gas will be available in substantial quantity into the next century.
I hope that that will be brought to the attention of the hon. Member for Brigg and Scunthorpe (Mr. Ellis), who last Thursday suggested that by the time it took to build a pipeline from Scotland to Northern Ireland supplies of natural gas would be almost depleted. At the most, it would take two and a half to three years to complete the pipeline, if the decision was taken tonight. When completed, many years of gas supplies would be left for the whole of the United Kingdom. I trust that Northern Ireland will benefit from its 20 years of the share.
How much will this cost? Of course every day that it takes to reach a decision pushes up the cost. However, it is estimated to be in the region of £50 million. That is not a small sum of money, and none of my colleagues would suggest that it is. It is approximately the same amount as it will take to set up the De Lorean car plant. I wish that venture every success. But in this case we are not talking about 2,000 jobs possibly being created. We are talking about 2,000 jobs which are already in existence being threatened and which will be lost if Northern Ireland does not get natural gas. There is no doubt that it would take as much as the £55 million which De Lorean is receiving to get those 2,000 men back into employment. Of course, that does not take


into account the decided advantages to the Province in having energy at this particular cost.
We are asking that the Government make a decision which will safeguard those 2,000 existing jobs and perhaps add to them. I do not want to rehearse all the arguments about who in Northern Ireland uses gas, such as the low income groups, families on family income supplement and the poorest members of our community. Such people would automatically receive a boost to their standard of living without any further handouts being given.
For once I must welcome a comment from the Commission of the European Communities. A letter signed by Mr. Richard Burke states:
 The final decision is essentially a matter for the Government of Northern Ireland, in conjunction with other interested parties but the Community institutions would be very ready to consider loan assistance for any viable scheme which the Government decided to implement.
I know perhaps better than most hon. Members would be prepared to concede that here we are talking about getting back a little of our own money. But this is as good a scheme as any for getting back a little of our own money. If the Minister has not already been contacted by Commissioner Burke, I hope that he will study his recommendation and that when he announces his decision in early January he will be able to tell us that he has put in a claim for a sizeable proportion of the costs.

7.45 p.m.

Mr. William Craig: As my hon. Friend the Member for Armagh (Mr. McCusker) said, we on this Bench decided to select energy as the principal topic in the discussion. In every sense of the word it is a burning question and like all burning questions, it can be very expensive. I shall not follow my hon. Friend in his remarks about the gas industry, although I support him strongly in what he said. I should like to draw the attention of the House to the problems facing the coal industry, but before I do so I should like to spread the net a little wider.
The Estimates make reference to a grant of funds to the Northern Ireland Development Agency. Development is one

of the big problems confronting the people of Northern Ireland, and I am sorry to say that I do not find the survey which one makes an optimistic one. Indeed, when I look at job opportunities in Northern Ireland, I am full of pessimism. I do not share the Minister's feeling that we are turning the corner, with a marked improvement in industrial investment. I have a suspicion that if many of the temporary aids—such as the temporary employment subsidy for which we are granting further money tonight—were removed from the Northern Ireland scene tomorrow the level of unemployment in the Province would jump to about 20 per cent. That is a horrifying picture for any community.
One appreciates that in the present economic climate it is not easy to encourage new ventures, but, in my opinion, the temporary aids at present given to Northern Ireland are creating a totally unjustified sense of complacency, not only in Government but in the community at large. To use a phrase which was resurrected some time ago by a distinguished personage, I think that the Northern Ireland Development Agency should pull its finger out. I am not satisfied that what is at present happening in Northern Ireland call be called imaginative development.
Northern Ireland will have no future if the effort is concentrated on creating enterprises to take in each other's washing. More than anything else, Northern Ireland needs to concentrate on introducing new technologies, particularly higher technology. We are now talking about micro-electronics, and that is the sort of thing on which we should be setting our sights in Northern Ireland.
I shall not indulge in knocking the De Lorean car project, although I have considerable doubts about its long-term future, even conceding that it has a short-term future. But that is the sort of assembly exercise—a Meccano industrial operation—which will more and more be attracted to the Third world. It will not be able to operate from communities such as the United Kingdom. It seems to me that much of the development in Northern Ireland is of that Meccanotype assembly operation.
The hon. Member for Abingdon (Mr. Neave) touched upon something which is


very close to my heart, representing Belfast, East as I do, and that is the problem of our ship industry. From what his right hon. Friend said last week, the Minister will have noted that, for instance, he envisages a further rundown of employment in the engine works and foundry at Harland and Wolff. That is one of the sectors of the shipbuilding industry that should be capable of diversifying its activities. I find it horrifying that we envisage a further rundown of the manpower of any section of Harland and Wolff. Indeed, I believe that it has already been reduced to such an extent that it cannot be a viable proposition. One should be concentrating on attracting greater manpower into the engine works, and into the foundry in particular.
With all the pipeline projects that are in progress in Northern Ireland surely more of that pipework can be manufactured in Northern Ireland. The capacity to build engines can be related to industries other than the shipbuilding industry.
There is one other hardship that I wish to highlight this evening. For more than a year handicapped people, dependent on transport provided by the health services, have had to stay indoors because of a dispute involving the drivers of the vehicles. I find it particularly sad that a section of the community which gets so little out of life should have been penalised for so long. It is not for me to enter into the merits of the dispute between the employers and the drivers. It is totally reprehensible that after 12 months nothing has been done to help people who are totally immobile. If the regular service of the boards themselves cannot be used, surely some arrangement can be made with local taxis, minibuses or contract hirers. People who are crippled with one disease or another should be given much greater priority than has been extended to them over the last 12 months.
I come back to the main subject of this evening's debate. The coal industry in Northern Ireland is the greatest source of energy open to Northern Ireland. Sometimes, I am frightened by Northern Ireland's dependence on the coal industry. I wonder whether the Government realise just how massive that dependence is. Sixty-five per cent. of our homes are heated by coal, 14 per cent. by electricity,

15 per cent. by oil, and 6 per cent. by gas. As far as I can ascertain in terms of new housing developments, coal will be used in 80 per cent. of the new homes. This percentage would appear to be increasing rather than diminishing.
Northern Ireland is extremely dependent on coal. While we can say, in Northern Ireland terms, that it is the cheapest fuel in Northern Ireland, it is only in those terms that one can say it is cheap, because it is a very expensive fuel in Northern Ireland. It is dearer than it is in the United Kingdom, except for parts of South-West England.
This difference in price is growing quite alarmingly. I shall give some examples. In June 1977 the price of group 2 coal in Belfast was £44·64 and in London it was £43·80—a difference of approximately £1. In Manchester the price was £36·70, a difference of £8. In Leeds it was £33·80, a difference of approximately £10. In November 1978 in Belfast the price was £56·32 and in London it had risen to £52·75—a difference of almost £4, compared with a difference of £1 in June 1977. In November of this year the price was £44·75 in Manchester, which is a difference of £12 from the Belfast price. In Leeds it was £42—a difference of £14. So the gap is widening, and it is a gap which we should see closed.
A particularly strong case can be made on behalf of the consumers of coal. Looking at the problems of sources of energy in the future, one can say that the United Kingdom has useful, workable resources of coal for at least 300 years, whereas the reserves of oil and gas are limited. I do not think that I am overstating matters when I say that in 20 years' time the United Kingdom will depend on coal and nuclear power. Therefore, it is important from the consumers' point of view that the coal industry in Northern Ireland should have a long-term strategy which considers the needs of the majority of consumers by assessing the resources of all fuels in order of value.
The Government, clearly have not done this. They have supported electricity with the sum of £450 million, which has either been given or is promised. On the other hand, the gas industry has received about £10 million. It is interesting to consider these figures. They would supply the coal users of Northern Ireland at today's


prices with free coal for 10 years. No benefit has been given to the consumers of coal in Northern Ireland. Winter fuel heating discount has been given to users of electricity and gas, but not of coal. I believe that there is a special case for treating all fuels alike. Consumers must have equal opportunity to benefit.
In making the case for coal, I want to make it clear that I am not arguing for a total or an increased dependency on coal. I am arguing that coal should be treated on the same basis as other fuels. Having regard to its particular importance to Northern Ireland, I ask the Government to consider an urgent policy for a reduction in the cost of that source of energy to Northern Ireland.
My hon. Friend the Member for Armagh made a valid point when he said that we are a part of the United Kingdom. One of the advantages of being part of the United Kingdom is the right that every citizen or every part of the United Kingdom has to call upon the resources of the nation, not as supplicants but as citizens claiming something as a matter of right. For a long time Northern Ireland has been denied the right that other parts of the United Kingdom take for granted. We now, not as a matter of special pleading, claim to be treated the same. We say that this is a matter of simple justice. Political differences or constitutional arrangements should not interfere with that fundamental right.
There is no other way of stimulating the well-being of the people of Northern Ireland in terms of consumption, or of job opportunity, than having a sensible energy policy that compares reasonably with nearby competitors. I believe that Northern Ireland can, at very little cost to the taxpayer, have its energy costs reduced in a most dramatic way.
There are all sorts of problems that the Government must face when they are framing fundamental policies of this kind. It always astonishes me that when we get involved in this kind of planning all sorts of loose ends seem to be flying about about. When I was inquiring into the sources of energy in Northern Ireland, it struck me that whether one wanted to heat one's house by electricity, gas, coal or oil—whatever the source of one's central heating—one would be

inhibited by the grave shortage of copper piping. That is something which I have stumbled across by accident, but it is a serious problem to all those who are planning new housing estate or developments in Northern Ireland. Deliveries that are due have now been postponed until at least February 1979, and that is in spite of the world being searched for alternative sources of supply. Scandinavia has been tried, and so have Canada and Italy to try to make up the deficit.
It would seem that the present position is that those who have regular orders for, say, 40 tons are having their deliveries reduced to 6 tons—that is if they are getting any supplies at all. Although this is not directly related to the main argument, I ask the Minister to see what can be done to alleviate this serious problem.
I hope that when we come to consider similar Estimates on these subjects a year from now, my colleagues and I will not feel it necessary to raise the matter of energy costs as a special case. We have had many promises but very little action in recent time. The people of Northern Ireland and their representatives will not only be dismayed but will be rather angry if something positive is not done on this subject within the next 12 months. Within the next few months we hope to hear of a long-term well-thought-out energy policy for Northern Ireland which will enable us to compete with equality in the markets of the world.

8 p.m.

Mr. John Dunlop: should like to draw the attention of the House to Class XI, under which a sum of £14 million is allocated for expenditure by the Department of Health and Social Services, and where one sees the phrase "certain other services ". I think that that might apply to hospitals in Northern Ireland.
I propose to comment briefly on the smaller acute hospitals over which there hangs a threat these days. This threat emanates from the policies of the Minister's noble Friend in another place who administers health and social services in Northern Ireland. I want to put forward some claims for the smaller acute hospitals and the vital role that they play in the Province, particularly in that area known as the west of the Bann and in


the far western area of West Tyrone and Fermanagh.
Those who are campaigning against the eventual closure or rundown of the smaller acute hospitals are not against the present plan for the building of large specialist hospitals in Antrim and in Coleraine. They recognise the possible need for them, but what they are against is the plan to run down and finally to decimate the smaller acute hospitals.
I mention especially the Mid-Ulster hospital in Magherafelt and the Tyrone county hospital in Omagh, which serve large rural areas. In the Mid-Ulster area, a population of 60,000 to 70,000 are served by the Mid-Ulster hospital, which has one or two special features. One is that it was the first hospital in Western Europe to have an intensive care unit. It was the pioneer of that phase of hospital treatment. This unit has meant the difference between life and death to people seriously injured in road accidents and the victims of terrorist activity in South Londonderry and South and East Tyrone. Often death would have been the result in many cases but for the availability of the Mid-Ulster hospital and the extra care given in the intensive care unit. I repeat that this has meant the difference between life and death. This is a strong argument for the retention of a hospital such as the Mid-Ulster hospital, Magherafelt, and the Tyrone county hospital, Omagh.
I shudder to think what would happen if those two hospitals were run down to mere casualty stations if there were serious accidents in the area and patients had to be transported all the way to Antrim. That would be a serious matter. There are mountainous areas around Drapers, town and Omagh, where road conditions and communications are very poor. The prospect of transporting seriously injured people over long distances to a central hospital in Antrim is simply not to he contemplated. Indeed, there is grave concern among general practitioners in these areas because of the threat that hangs over those hospitals. Once again, I insist on the need for their retention.
Some time ago I said in this House, and in Committee, that perhaps a fraction of what is to be invested in the large area hospitals would help further to equip the smaller acute hospitals and

perhaps offer better rewards to specialists and consultants to encourage them to come to these hospitals to give of their skills in areas which need them. Some time ago I had a short conference with the British Medical Association in Belfast, at which I heard of certain surgeons and doctors who spent their month's holiday going to one of the Commonwealth countries or to the Continent of Europe, taking their families with them, giving of their skills, receiving remuneration therefor, and coming home, with all expenses paid, with about £1,000 in their pockets—perhaps to go towards a new motor car—for one month's work. That was a vital factor. It was an eye-opener for me. I believe that something should be done about the rewards that are offered to people for their skills in these needy areas.
One other feature of the Mid-Ulster hospital is that it has a successful training school for nurses. I wonder whether the House is aware that the nurse of the year in 1977, in the whole of the United Kingdom, came from the Mid-Ulster hospital. That came about only because of the wonderful training that she had had there and the way that she exercised her skills in that hospital. She was competing against nurses from the whole of the Kingdom, and she obtained the first place. The question of the training school there needs to be looked at. One of the threats that hangs over this hospital is that the nursing school will be withdrawn and the vital role that has been played there for so many years will be taken away.
I shall not detain the House for much longer. I thought that I would mention these factors to emphasise that the general public, giving their opinion through their local councillors, are very much against the threat to the smaller acute hospitals in Northern Ireland. They have shown that they do not want this rundown to happen, and they cannot contemplate the loss that it will mean to the area of Mid-Ulster, around Magherafelt and further west in Omagh and County Tyrone if these hospitals are run down to mere casualty stations and people are deprived of vital medical and surgical help.
It is frightening to think of what would happen in the Omagh area if there were another bombing attack such as that


which happened a couple of weeks ago, when many people were injured by flying glass and debris because of insufficient warning being given of the bombs that half wrecked Omagh. Many people were treated at the local hospital. Some of them may have had to suffer serious and lasting disability had they had to be carted away to Altnagelvin hospital in Londonderry. That was the nearest big hospital, and it would be the nearest hospital for such cases in the Omagh area.
Therefore, in looking at this expenditure of £14 million for health and social services and "certain other services ", I advocate that serious thought be given by the Minister to the matter that I have raised. I hope that he will prevail upon his noble Friends to think again about the smaller acute hospitals and come to the vital decision to retain their services and improve their equipment, and thus meet the vital need that exists in those areas.

8.10 p.m.

Mr. John Farr: I want to take up the theme developed by many other hon. Members in the debate—the cost of energy in Northern Ireland. I point out to the right hon. Member for Belfast, East (Mr. Craig) that, while mainland Great Britain may have coal reserves of some 300 years in total, quite a large part of those reserves is locked, one hopes for ever, inaccessibly under the Vale of Belvoir, so I hope that he will not take that part of the reserves into consideration.
We have heard graphic figures in the debate. Last July, I wrote to the Library for some statistics in relation to the cost per therm of fuels used by industry in Northern Ireland in 1977, the last year for which figures are available. Those figures bear out the figures that we have already had given to us in the debate about the cost, for example, of gas, which to the domestic user in Northern Ireland is about three times the cost in Great Britain. The cost per therm of industrial fuels is slightly over three times as much. In Great Britain in 1977, the cost per therm was 9·26p whereas in Northern Ireland it was 30p.
Over the whole range of fuels, whether gas, coal, heavy fuel oil, gas oil or electricity, the cost in Northern Ireland

is considerably higher than the cost in the rest of the United Kingdom. The House must recognise that this has a debilitating effect on Northern Ireland industry. It must make the whole of Northern Ireland industry less competitive if it has to absorb in its manufacturing costs these much heavier overheads which are not encountered on the mainland.
It is apparent that the cost per therm of gas in Northern Ireland is about three times what it is in the rest of the United Kingdom. Last summer, a number of us suggested that the Government should see whether some of the big supplies of natural gas which have been found in Morecambe Bay, at the top of the Irish Sea, could be piped direct to Northern Ireland instead of being piped ashore to Great Britain. We put down an early-day motion to that effect. I have learned since then that the Morecambe Bay reserves have proved extensive, and one hopes that prospecting is going on further into the Irish Sea with the possibility that, if a discovery is made even nearer Northern Ireland, the obvious solution will be taken of piping a supply of gas directly ashore to Northern Ireland.
We have all heard estimates of the cost of getting natural gas to Northern Ireland, but the proposals I have seen in almost every case involve a rather circuitous route, sending North Sea gas through Scotland and then across to Northern Ireland, a far longer route than piping it direct from any discovery in the Morecambe Bay area or further west on to the mainland of Northern Ireland.
If one is perhaps deterred by the massive cost of piping this gas direct from Scotland to Northern Ireland, possibly a more direct, cheaper, shorter and just as effective way of connecting Northern Ireland to the United Kingdom gas-piping system would be by piping the gas ashore to Northern Ireland straight from the northern Irish Sea gas fields which are also being exploited.
The right hon. Member for Belfast, East spoke of the cost of coal in Northern Ireland. Can the Minister say something about the prospecting that was due to start on 5th December in Coalisland? I understand that his Department has a programme to spend about £250,000 a year


on drilling for coal in various parts of the Province. That does not seem a very understand that the drill being used is a ambitious programme, especially as I very large Canadian-type drill. Has this programme begun on schedule? Is the Minister thinking of giving effect to the recommendation, which has been made elsewhere, that the proposal to close down certain coal-fired generating stations in Northern Ireland be postponed?
Another matter which I want to touch on and which is related to the cost of energy to industry in Northern Ireland is the position of the Northern Ireland Development Agency. We have tried to make energy the theme of this debate, because energy is probably the biggest problem for Northern Ireland at the moment, but I feel if we do not seize the opportunity to ask about the Agency we may be losing an opportunity that we should not lose. A couple of matters about the agency have been worrying me for some time.
The Agency was set up about two and a half years ago. I understand that the accounts for the year ended 31st March 1978 were published on 1st December, although they are not yet available in the Library. I understand from the press that the accounts show that over £16 million has gone into purchasing equity shares in the new De Lorean motor car factory, and we all wish that venture every success.
I presume that that £16 million was in the 1978·79 accounts, since, I understand, all that is shown for investment in companies during the year ended 31st March 1978 is £6.75 million in 19 companies. However, as I have said, the accounts are not in the Library and it is therefore difficult to comment in detail. I point out, however, that the latest available accounts for the Agency are those for the 11 months ending 31st March 1977. They were not published or received until 16 months later in July 1978. We are still waiting for the accounts for the year ended 31st March 1978. The long delay in the preparation and presentation of the Agency's accounts should be looked into and possibly eliminated.
Can the Minister tell us how the equity shares in De Lorean are structured? I have not seen it explained in detail yet,

and I await his answer with great interest.
I have with me the Agency's accounts for 1977. The information they supply is meagre. They show, for instance, that £6·8 million was written off during the year. Northern Ireland Development Agency interests in various companies are listed. In the case of wholly-owned or mainly-owned companies, why cannot the individual accounts of those companies be published? Has the Minister considered that? If not, why not? There may be a good reason, but where, as is the case with the Northern Ireland Development Agency, five or six companies are wholly owned or mainly owned, there seems to me to be no reason why full public accountability cannot be maintained and the accounts published and made known to all concerned. The report should be broken down company by company in future so that these matters can come under proper public scrutiny.
My hon. Friend the Member for Abingdon (Mr. Neave) referred to Harland and Wolff. I echo what he said. Surely the Minister can use his influence with the Secretary of State for Defence to ensure that defence contracts are placed with Harland and Wolff. If that cannot be done, if it cannot secure defence contracts, for the construction of new vessels, why cannot it secure a contract for the major repair and refitting of, for instance, one of our "Fearless" class vessels or other naval contracts?
It is very difficult to comment sensibly on Harland and Wolff in this debate, because the accounts for 1977 have not yet been published. We shall shortly be in 1979. It makes it very difficult for hon. Members who try to take an interest in these affairs to take part in a debate such as this when we cannot at least have accounts that are only a year old. If the latest accounts available are the 1976 accounts, we are talking about the company's financial situation as it was nearly three years ago, which is rather like talking about history instead of looking to the future.
I wish that the Minister would say something about expediting Harland and Wolff's accounts in future. We have the right to see the 1977 and 1978 accounts in rapid succession in 1979.
The economic plan for Northern Ireland has been mentioned at the Dispatch Box by the Secretary of State on another occasion. I am not critical about the plan, but I am curious. It has been held out to us as something to look forward to, something that the House will find interesting and encouraging. Can the Minister satisfy our curiosity and tell us a little about the plan tonight and say when we shall learn the full details of it?
Can the Minister also say anything about any restructuring of the Northern Ireland Economic Council that may take place at an early date? I echo what my hon. Friend said in asking whether such restructuring would be on the lines of our little Neddies in the United Kingdom.
With those few points, particularly emphasising the theme of energy, which is critical in Northern Ireland, I welcome the order.

8.23 p.m.

Mr. Michael English: I wonder whether my hon. Friend the Minister realises just how the procedure which we are following illustrates the way in which in general the Government and to some extent the House have allowed our financial procedures to become unsatisfactory—in fact, to become chaotic. Every hon. Member will recall the row we had last week, when, on an Opposition Supply Day, my right hon. Friend the Prime Minister was nominally moving a motion to stop debate on exactly the same sort of matters concerning other parts of the United Kingdom as we are now discussing in relation to Northern Ireland.
In the case of Northern Ireland we have a draft order. It is understandable that every hon. Member from Northern Ireland and hon. Members from elsewhere wish to discuss it. Indeed, I think that technically we are discussing a motion that it be approved, a motion that I think could conceivably have been amended to delete particular items. That is not possible on matters affecting the rest of the United Kingdom.
I hope that my hon. Friends on the Government Front Bench will convey to my right hon. Friend the Secretary of State and the Cabinet generally that the overwhelming majority of hon. Members

for Great Britain—and, I believe, many of those for Northern Ireland—desire that we should all be allowed to discuss the details of public expenditure in our respective parts of the United Kingdom.
There is not the slightest doubt that such a procedure as this would be more helpful than that which we followed last week, which was described in the Press as a shambles, and the procedure under which tomorrow night we shall be allowed to discuss a Consolidated Fund Bill for United Kingdom expenditure, some of which relates to Northern Ireland and some of which relates to the rest of the United Kingdom. There is not the slightest doubt that we shall be told tomorrow that we can discuss anything we like on Second Reading but that in the Committee stage, taken immediately afterwards, the Bill is unamendable. What is clearly needed is a revision of these rather archaic procedures for the discussion of public expenditure.
In the case of Northern Ireland there are special problems. Hon. Members may have seen a Written Question about the Northern Ireland electricity service that I asked recently. I asked whether it was obliged to prepare accounts and publish them. I received a reply saying that a statement of accounts—a subtle difference from "accounts", as I understand it—is to be found in the annual report. I also asked whether it was obliged to have them audited, and, if so, by whom. I received a reply, dated last Thursday, that they were audited by a private firm of auditors.
I was also told that, although the accounts were not laid before Parliament, they were placed in the Library of both Houses. I cannot reiterate too often that that sort of specious reply has had its day. The difference between an item's being placed in the Library of the House of Commons and being laid before Parliament is that in the former case the Comptroller and Auditor General is not allowed to audit it. That difference should have been stated in the reply. Anyone who thinks that he will get away with a cheap, specious reply that "It does not matter. They are not laid before Parliament. They are placed in the Library ", wants to look up the Exchequer and. Audit Acts. He probably has, and he probably thought he would get away with it. As soon as possible, the Northern Ireland electricity


service and everything else in Northern Ireland that is in a similar position should be brought within the jurisdiction of the Comptroller and Auditor General.
We know from last week's debate that the powers of the Comptroller and Auditor General are weak and that his staff are underpaid and underqualified. But he is the best we have at present. Until we are allowed to replace the present Exchequer and Audit Acts, it is no use our allowing these newly created organisations in Northern Ireland to become quangos, escaping from the control of the Comptroller and Auditor General and this House.

8.29 p.m.

Rev. Ian Paisley: It is an ill wind that blows nobody any good. We should be thankful that the Government want to keep controversial matters out of the House as this means that we are given more time for Northern Ireland business. At times the crumbs from the rich man's table extend to Northern Ireland Members. Tonight we are having a debate at a reasonable hour, which means that we have time to discuss these important issues.
I put on record that I wholeheartedly agree with the hon. Member for Nottingham, West (Mr. English). I have been very alarmed to see the way in which public money has been spent in Northern Ireland without any public scrutiny at all. In the old days, there was a proper committee in the Stormont Parliament which acted as a Committee of this House acts. These matters were laid on the table, civil servants were examined and expenditure was put under scrutiny. That cannot happen today. Some of the organisations which now get large chunks of money do not come under the scrutiny of the Comptroller and Auditor General and therefore are outside the terms of scrutiny of this House.
The electricity service in Northern Ireland acts like a dictator. It is a vicious villain to those who pay their electricity bills. If one pays an electricity bill in Northern Ireland, for every £100 worth of electricity one pays an extra £5 to make up for the people who do not pay. The electicity service has taken a decision that those who pay their debts will pay for those who do not pay their debts.
I do not pay the extra £5 in every £100. I deduct it from my electricity bill and I hope that the electricity service will take me and many others who do the same to court, because we will not pay for the electricity we have not burned. Can any Government Department put a levy on a person for paying his debts?
The Minister says that decisive steps will be taken and that people who do not pay will have the supply cut off. Then workers in the electricity service say that they will not go into certain areas or take action within those areas. These are the Republican areas, where there are some of the worst debts. These arc the "no-stay" areas. They used to be called "no-go" areas. The fast vehicles of the British Army drive through them but do not stay. No electricity man will go in and put his head on the gibbet for this Government or any other Government. Therefore, those people go on burning their electricity and laughing.
Also, they have a way of bypassing the meters. I shall not tell the House how that is done in case someone gets the bright idea to do it as well. However, it is well known to the people of Northern Ireland and there are simple ways of bypassing the meters. One may ask, what happens when the inspector comes round —what does he do? But he does not come around. He is not permitted to go into these areas. As a result, many accounts are estimates, and if the truth be known they are very low estimates.
I protest on behalf of the honest people in Northern Ireland who are paying their bills and who are doing the right thing. After denying for years that there was any charge, and after telling hon. Members that such a suggestion was bunkum, the electricity service at last admits that there has been a charge—£5 for every £100. This is a ridiculous situation. Has the Minister the power to stop it? Has the electricity service more power than the Minister? Will it become the practice in Northern Ireland that honest, upright people of integrity who pay their bills as soon as they get them will be discriminated against simply because they are honest and pay their bills? It is time that we had a statement from the Minister to the effect that, come what may, people who are consuming electricity and refusing to pay for it will have their electricity supply cut off.
In an area which is not Republican, a person who fails to pay an electricity bill within three days will have the supply cut off. This has happened in my constituency to people who have always paid promptly but who, due to an oversight, have failed to meet their debts.
A constituent of mine telephoned me the other day saying that two men had come to her door to tell her that her electricity bill had not been paid. She replied that it had been paid. They cut off her electricity supply. Shortly afterwards, she got back the stub of her cheque. She informed the electricity service, and she was told "We are very sorry. The computer made a mistake." The word of an honest, decent person of integrity could not be taken. All her back record was perfect. She has been discriminated against and harassed. It did not seem to matter how many people she had in her family. At the weekend, she had no electricity and no opportunity of getting it turned back on. But if someone lives in a "no-stay" area, he can burn as much electricity as he likes and no one will be the wiser. If he decides to bypass the meter, even if the day ever comes—

Mr. English: When the hon. Member gets an opportunity, perhaps he would care to check whether the private auditors who audit this service have ever been instructed that, in addition to all that they normally do to audit a private company, they should investigate matters such as this, because they are, after all, taking the place of the Comptroller and Auditor General, who is not allowed to act.

Rev. Ian Paisley: I shall communicate that to the auditors. Certainly I am extremely angry about what is taking place. Today we have been informed that the debt of the electricity service has gone up by £4 million this year. It is bound to go up because what effort is being made is restricted to the areas which are not deepest in debt. There are, of course, Protestant people in those areas who do not pay their electricity bills, and they are to be denounced as loudly as those in other areas who do not pay. Everyone should pay, but they should not be asked to pay the extra which is being demanded of them.
I am prepared to make an issue of this. I shall make it my business to let as

many people as I can know about this practice. I have said it on radio and on television and I repeat it in this House. It is a scandal that some people are refusing to pay their electricity bills and that decent people have to pay for them. The electricity service says "It is only £5 in £100. What is that? It is a small matter." Yet we had denials for a long time that it was taking place. Now we have got to the truth of the matter, and now the electricity service is screaming about £4 million. I do not know what it will be next year, with the cost of electricity going up, with the state of affairs in Northern Ireland what it is and with the bombers back on the streets.
The centre of Armagh is a shambles, and many other towns are suffering in the same way. We heard in this House about the great advance that was being made by members of the British Army. However, those same members of the British Army could tell right hon. and hon. Members that matters will be very serious between now and Christmas. There will be more bombings and more killings. Prominent members of the public in Northern Ireland have been visited by the special branch of the RUC and warned that there will be very serious assassinations before the turn of the year. Men are being told to watch themselves. How they watch themselves in Northern Ireland is more than I can understand.
This House should realise that, whilst we discuss these matters tonight, the most pressing of our problems is the deterioration in our security and what is happening in Northern Ireland. That is the vital issue that we need to be concerned with, when people are being murdered and businesses are being bombed out of existence.
Nothing that is said from these Benches will influence the Government on the gas issue. We have had many promises about this. Are the Government aware that the longer they dilly-dally the greater burden they will place upon the people of Northern Ireand? Are the Government aware that if we do not have this pipeline, or a subsidy to make our gas the same price as it is in the rest of the United Kingdom, a vital industry in Northern Ireland will close down?
We have heard much about encouraging new jobs in Northern Ireland. The Northern Ireland Office must tell us


whether its main objective is to save jobs or to create new jobs. Many business people in Northern Ireland ask "Why do not our businesses, which have been in existence for as long as Northern Ireland, receive the encouragement to which they are entitled, when other firms from elsewhere are taken by the hand? "
I regret that I have to raise the matter which I am about to raise, but the time has come for me to raise it. A Northern Ireland man experienced a breakthrough in construction. He invented a new type of brick. The building industry newspapers have carried various articles on the development. It is said that it can revolutionise the building industry.
When that man came to me, I took him to the Department responsible in the Northern Ireland Office. The officials said "This is a wonderful invention ". A few days later the man received a letter from those officials saying that they did not believe that it could be developed in Northern Ireland. They advised him to sell it across the water.
This was a Northern Ireland man with a Northern Ireland invention. He has now had substantial offers from the Benelux countries and the Republic of Ireland. After many meetings with the Department's officials, no substantial offer of help has been made to him.
That letter raised my wrath. To say to a man that an invention which could be of benefit to Northern Ireland should be sold elsewhere is serious. I fear that much of industry's planning is done on the assumption that people from outside Northern Ireland are more reliable than those who have been in the Province for years and have proved not to run fly-by-night companies.
I hope that the Minister can tell us about the Strathearn Audio Company. How many millions of pounds have been given to that company? I understand that it is now to be closed, after all the money that has been put into it. How does that company stand? Will it be wound up, reopened and the debt forgotten?
We all welcome efforts to create jobs for the people of Northern Ireland. The devil finds plenty for idle hands to do. People who are employed have self-

confidence. When they go out in the morning and come home in the evening they can lift their heads high. Nothing demoralises a person or family more than the curse—or cancer—of unemployment.
I am not happy about some aspects of the De Lorean venture. It should be made clear that it is not situated in an unemployment black spot. One would think that this company was placed in West Belfast. It is not. It is in the Dunmurry area. I asked Questions in the House and the Minister admitted that it was in the Dunmurry area. The employment figures in the Dunmurry and Lisburn areas are among the highest in the Province. We need to keep these matters in mind. I know that De Lorean hopes to bring employees out of the black spots into this area, but let no one in the House be side-tracked into thinking it is placed in a black spot. It is not.
We need more information about NIDA's interest in this project and more information about what NIDA is doing in other fields. I understand that the Government have given another £50 million to NIDA. I wonder whether there has been any indication from the company or from the Government about how that money is to be used.
As transport is covered by this order, I should like to urge serious consideration of the transport links between Northern Ireland and Great Britain. Fares on the shuttle flights of British Airways are ever going up. A return ticket is to cost £74, which is higher than some transatlantic single fares on which one gets at least two meals. I came to this House today by shuttle. The plane burst four tyres and could not return. We were led to believe that on the shuttle service there would always be a back-up plane. Today, a relief aircraft had to be brought from Edinburgh, and all the passengers had to wait.
I am not a prophet or a son of a prophet, but I believe that the trip will soon cost £100 return. It seems that no protest can stop this rise in fares. British Airways has a monopoly. Flights from Heathrow have become more accessible, with the introduction of the train service to the airport, and British Airways are taking advantage of this. If the airline brought down the fares, more people would travel and there would be more


business. It would make British Airways far more viable.
I should like to mention the jetfoil project about which the Northern Ireland Development Agency was at first very chary. What happened? We found that there was an exchange of information between NIDA and its counterparts in the Republic. Lo and behold, the Republic decided that it was a good idea and has gone ahead while we are still dragging our feet. With all due respect to NIDA, its first priority should be Northern Ireland. If it can pass out some tips to Dublin, that is well and good, but its first priority should be Northern Ireland.
A jetfoil service would be most helpful with the rates that could be offered on a return journey to Great Britain. This is a matter that should be urgently considered not only by NIDA but by the Ministry of Commerce and the entire Northern Ireland Office. We need different links with the mainland. We should not have to depend on British Airways.
A prominent business man was going over who has brought many business men from foreign countries and helped investment in Northern Ireland. He had three newspapers and the security man would allow him to keep only one. I do not know whether he took The Guardian from him, but he certainly took two newspapers.
I once had a hard-back book and the security man said that I could not take it. I followed the example of the right hon. Member for Down, South (Mr. Powell) and tore the covers off, saying, "You keep the covers and I will have my book to read." I was once followed past the security gate when I had a Bible in my hand. The security man said, "You are not taking that on the plane." I said," It would be a good man who would take the Bible off Ian Paisley. Would you like to try?" He said "You run on, then."
That sort of thing, which happens at the London end, not the Belfast end, discourages people. Many people have said "Is it not ridiculous how we are treated on these flights? "
When we reach London, we are told that our baggage will be waiting for us immediately we disembark. I have waited as long as 35 minutes for hand baggage. Sometimes one gets it in 15 minutes, and

if one is very good it might be only 10 minutes. But all the passengers have to queue up two or three deep at a board fighting for their plastic bags and cases.
This is the sort of service we get. British Airways says that the shuttle is wonderful, but it does not help Northern Ireland to be served in this way. The Northern Ireland Office needs to take this matter in hand.
Hospitals have been mentioned. It is sad that the Minister responsible for education and for health and social services is answerable in another place. As I have said before, these are two of the most important Departments governing the everyday life of our people. Yet the Minister responsible cannot be questioned personally in this House. Surely other Departments could be given to a Minister in another place.
Both these Departments are being reorganised. Education is being completely overhauled on comprehensive lines. The hospital service will be completely overhauled and many hospitals will be closed. Is it part of the Government's overall policy that the man who takes the decision should not be answerable to this House? With due respect to the Under-Secretary, he cannot answer many of our questions because he did not make the decisions.
Moreover, in this country, if a Minister takes a decision about which people are unhappy, there is always a final appeal to the Prime Minister. We are attempting to secure a meeting with the Secretary of State for Northern Ireland about the hospitals that fall within the jurisdiction of the northern board. We have asked the right hon. Gentleman to meet a deputation of elected representatives from all the councils in the area and of those people connected with the hospital services. This request was made by the hon. Member for Antrim, South (Mr. Molyneaux), who is leader of the official Unionists in this House. It has also been made by me as leader of the Democratic Unionist Party. So far we have had no response to the request. Why is the Secretary of State not prepared to discuss with the elected representatives a matter that has caused great grief in these areas?
The Mid-Ulster hospital has been referred to, but other hospitals are also


affected. There is the hospital in Antrim —I am not talking about the new hospital. Another affected hospital is at Newtownabbey. I read an account in the press of a protest by the hon. Member for Antrim, South and the people there. There are the Larne hospital and the Waveney hospital, Ballymena.
My concern is that a decision, once taken, was subsequently overthrown. The previous Minister responsible for hospitals in Northern Ireland, who has now moved to the Department of Health and Social Security, said that the plan was for the Waveney hospital to be the basis for the special acute hospital in that area but that limited acute services would be provided in the other hospitals. This is a most important matter because it is almost impossible to take emergency cases from some areas to Antrim.
I oppose the present procedure. I believe that the land that was earmarked in Ballymena for this hospital should have been used for that purpose and that all the statements that were made should have been honoured. That has not happened. The board decided that there would be acute hospitals in the area, but at its next meeting, by some jiggerypokery, that decision was reversed. I attended a meeting with the Minister on this subject. Also present was the mayor of Ballymoney, who was a member of the board. She asked the Minister when the decision was changed, and I suggested that the mayor should know that, but she said that she did not even though she was a member of the board.
So a change was made, and we cannot discover when, about the future of this new hospital. I understand that a tree has been planted where the hospital was to have been built, so I suppose that progress is being made. An American leader once spoke of the working class of America being crucified on a cross of gold. My constituents will be crucified on the tree that has been erected in this area.
Some acute services will be available at Coleraine, but certain other treatments, especially for children, will be available only in the new Antrim complex. That means that constituents of mine who live in Portrush and who need treatment for

their children will have to travel to Antrim for it. We parents understand the strain on a family when a child is ill and undergoing a serious operation. Yet parents are to be asked to travel long distances. This policy is not a good one, but it is the one that now applies.
I met the Minister in Ballymena and we met the medical staff of the Waverley hospital. He said "You should be very pleased that I have come to speak to you. You are getting more time than I give to others." The Minister should know that he is not Lord God Almighty, although he might take the title of "Lord ". I wish to tell that Minister that the people of Northern Ireland want their voices heard. If he is not prepared to listen to them and to answer their case, why does not the Secretary of State for Northern Ireland say "I must meet these people "? The Ballymena district council, the Larne borough council and the Magherafelt borough council have met to discuss these matters. At one of the meetings the mayor of the town of Larne took the chair and strong words were spoken. There were constant calls for the Secretary of State to meet the people.
Perhaps the Minister in replying to the debate will say whether his right hon. Friend the Secretary of State intends to meet us. It would be far better for those people to realise that the Secretary of State does not intend to hear their pleas so that at least they will know where they are and will not waste their time trying to meet him.
I wish now to turn to the topic of education and to ask the Minister a few questions. Who are the members of the curriculum committee for Northern Ireland, when were they appointed, and what powers do they exercise? There is great concern in Northern Ireland about the type of reading material that is being placed in the schools of Northern Ireland. This complaint has been made by many public bodies and responsible citizens throughout the Province. I do not think that young children should be allowed to read four-letter words, nor do I believe that they should be given reading material that contains the seeds of perversion. I am totally opposed to any such course. I have asked Questions about this matter and so far I have been given little satisfaction. We need to know the names of


those who are responsible for allowing this literature to be placed in schools.
I understand that there is to be a recommendation to the curriculum committee to change the basis of religious education in primary schools. A body has been set up for this purpose, and I should like the Minister to tell me who set up this organisation. Will he also say who called the recent conference, how the members were appointed to the committee, and what decisions were made? Was it decided at that conference to change the religious teaching in the schools, and, if so, will that decision stand? Furthermore, what schools have been chosen as guinea pigs for the introduction of this scheme, what is the general idea of the scheme, and what is the motive behind the idea to take out of schools the authorised version of the scripture?
Is it a fact that, in so far as this matter affects the Northern Ireland Office and educational matters, there are to be no more grants available to any religious body that wants to set up a voluntary school in the Province? Have such grants ceased in respect of religious bodies? Is it a fact that the maintained voluntary schools—particularly the Roman Catholic schools—will continue to receive grants and be able to set up schools? Will the Minister confirm that, if any other religious body wishes to set up a maintained voluntary school, it will not be permitted to do so, except when the board considers there is need for such a school?
Perhaps the Minister would be good enough to answer those questions. I agree that if someone wants to set up a religious school he should pay for it. I agree with that principle, and I believe that there should be one principle governing schools. There should be a State system of education with religious instruction outside the school, given to children by ministers of their own denomination. If any other group wishes to set up a school, it is entitled to do so, but let it run its school and pay for it.
Let me make perfectly clear that I do not want grants to be paid to any religious body. The religious body that I happen to lead is going to set up a religious school, but it will pay for it. I want the Minister to spell it out tonight. Is this

the law as it stands, and are we to have discrimination whereby another body can say it would like to do this but it will be prohibited?
I think that it would be a far, far happier situation if religion, of the various denominations, were to be taught, outside any religious curriculum that might be drawn up by any academic body, outside these particular schools.
I want to speak about the comprehensive system of education. Three working parties were set up to deal with this matter. Can the Minister tell us whether these working parties have reported? If so, where are their reports and what did they recommend? Could he also tell us what is happening in the various boards concerning the implementing of the Minister's decision that Northern Ireland should go comprehensive? Perhaps he would care to spell out what is happening, because we are told that the boards will make the decision. Are the boards to act on the recommendation of the working party?
We also have the matter of the selection procedure, where pupils are selected for grammar schools when there are no places available for them. Certain grammar schools indicated that they could take in these pupils but the Minister decided that they could not. I have a Roman Catholic grammar school in my constituency—at Ballymena—and it needed more places, and rightly so, because there were pupils waiting to get in. The same thing happened at the Cambridge House school in the town.
Who decides how many pupils should go to these schools? Or is this an attempt to decide who goes to a grammar school only after considering that there must be enough pupils to go to the secondary school, or the high school or whatever the comprehensive school is called? Are we to say to these pupils that, even though they have been selected, they cannot get a grammar school place? This does not help the parents or the children, and I think the Minister must look at that.
I raise again the question of the selection procedure presently being adopted. This puts the onus of selection on the schoolmaster. In a small community, where the schoolmaster is well known to everybody, this puts a very difficult task


on his shoulders because he must decide how the children are to continue their education. The Minister must look at this matter very carefully.
It does not seem to me that the limited examination is very much different from the 11-plus. This means that we have all kinds of problems arising in education in the Province. The Minister needs to tell us the way in which the Province is going, how the decision will be implemented, and what is the effect of the working parties set up by him. I should have thought that he would have waited until these working parties had reported before making any decision. But evidently he sets up working parties that do not report, or have not yet reported—or if they have we have not heard what their reports are—and has then made the decision beforehand. That seems to be pre-empting the whole business.
I turn next to the problem of cement supplies in the Province today. Is the Minister aware that the whole construction industry is slowly grinding to a halt in Northern Ireland? It is having extreme difficulty in keeping going. Further, is the Minister aware that the Blue Circle monopoly on the supply of cement to the Province makes it impossible for the Province to get supplies when Blue Circle is in difficulty?
What is the Minister doing to bring supplies of cement in from elsewhere? When supplies are available in the Republic, why cannot cement get into Northern Ireland? Is the Minister proposing to bring cement from Great Britain to help us in our present problem? I read that the Minister had sent a telegram to the Blue Circle company. I wonder what reply he received, and I wonder what he is doing in general regarding cement supplies.
In conclusion, I refer to planning matters. Many of us were delighted when we saw the Cockcroft report. Then we had the documents which the Department of the Environment for Northern Ireland issued in response to that report and the new regulations for rural planning, and we all got a shock. If there are some hon. Members who have not yet had a shock they will get it in due course, because we have discovered that there are to be areas of special control.
I was at a planning appeal the other day. The planning officer brought out a map. On that map a certain boundary was drawn, and he said "This is an area of special control." But in the planning document from the Department we were told:
 In defining the Areas of Special Control the Department will seek the agreement of district councils to the boundaries.
I have discovered that the district councils are only in the process of discussing these areas of special control.
Moreover, we were informed by the Ministry in its document that if an area is within two miles of an urban boundary where there is a population of 10,000 the old rules will apply. I wonder how much of Northern Ireland comes in under that. We are told also that where there is a population of, I think, 2,000, the distance will have to be one mile from the boundary in that district. Over the whole of Northern Ireland I suspect that there are not many places left after those two stipulations.
Is the Minister prepared to adjourn all the hearings until these matters are clarified? People are coming to planning appeals and maps are produced showing special control areas. They have not been discussed with the council, yet on that basis planning applications may be turned down. The commissioner who hears them has no option but to turn them down in keeping with the policy set out. But Cockcroft said:
The Committee does not accept that rural planning policy is administered in a sympathetic and understanding manner.
What will happen when the old rules apply to the special control areas? Will there be more sympathy and more understanding, or will people have to keep rigidly to the boundary which has been set down?
This is an extremely serious matter. I understand that as a result many planning appeals have had to be called off this week in the Province. The presiding commissioners have told those involved in the appeals that they do not know the whereabouts of the special planning areas and that they have not been discussed with the district councils. It seems that the maps have not been agreed. The commissioners have said "We are not able to make a decision, and we advise you to adjourn your case." It is only


right that they should take that view. The Minister needs to clarify the issue tonight so that we know where we are going. The Cockcroft report was eulogised. It received a great welcome. We now find that it is not so welcome in many areas. It seems that we are reverting to the old policy that the Cockcroft committee condemned.
The debate deals with bread and butter issues in Northern Ireland. When we deal with controversial issues, we almost always have full representation on both sides of the House. However, when we turn our attention to matters that bear on the ordinary people of Northern Ireland, there is always a reduction in the representation. Some of us come to the House to speak for the ordinary people of Northern Ireland. I trust that tonight our words have not fallen upon deaf ears and that some of what has been said will be of help to those persons in Northern Ireland who are struggling honestly to pay their debts, keep within the law and do what is right and proper for themselves and their families.

9.17 p.m.

Mr. Michael McNair-Wilson: The hon. Member for Nottingham, West (Mr. English) did us all a great favour when he reminded us that the purpose of the debate is to scrutinise Government expenditure. The hon. Gentleman was right to draw attention to the imperfections of the machinery that we possess for doing just that. All too often we find ourselves discussing sums that have been spent rather than being allowed to express our thoughts about future expenditure and, occasionally, to save money and so help the taxpayers whose representatives we are.
Tonight I raise only one issue—I do so under Schedule 1, Clause 2, Vote 1—namely, the grant to the Department of Commerce to the tune of £43 million. The Department and the Northern Ireland Development Agency are providing the largest amount of money that is going into the De Lorean car project, which has already been referred to by a number of hon. Members. I shall make that single issue the subject of my speech.
I am sure we are well aware that the De Lorean car project is to be built in a Government-financed factory on the Twinbrook industrial estate at Dunmurry.
The sum being provided from public funds amounts to £52·8 million. That sum is given by way of grant from the Department of Commerce to the tune of £18 million, plus £9 million in employment grants and loans of £6·7 million, leaving aside the equity investment of the Northern Ireland Development Agency of £17·7 million.
Clearly, a large amount of public money is being provided for the project. It is as large as the amount of public money that has been pumped into Chrysler UK by the Government. The difference is that Chrysler UK is an international car firm making a whole range of models, whereas the De Lorean project centres on one car, the DMC 12, of which only a handful of prototypes exists. It can be described as the dream child of one man, Mr. John De Lorean, an American citizen. It is to be borne in mind that public money will provide two-thirds of the working capital for the project.
I hope the Minister will forgive me if I press him now to answer many of the questions that I know are in the minds of hon. Members, answers that many of us have sought from other Ministers in his Department.
I start by saying that Mr. John De Lorean has an enviable reputation in the American car industry, having reached a considerable level of seniority in General Motors. But, just the same, an investment of £52·8 million is of a size which seems to me to require a lot of scrutiny. It requires scrutiny in terms of what it is to be spent on, which is the setting up of a car works on a green field site in Belfast. More than that, it requires the training of a work force, which at present has had no training at all, in constructing cars to take on the task of assembling this very exciting, very glamorous and, one might say, very advanced sports car.
I repeat that Northern Ireland has no history of making cars, apart from the fact that a tiny bubble car was marketed by Short Brothers and Harland about 20 years ago, though not with much success. Yet here we are with a green field site and with what one might describe as green labour which is to be trained to do the job on which we are spending £52·8 million. One might wonder, in those circumstances, what it was about this project which produced


such swift acceptance from the Northern Ireland Office, with so little disclosure to Parliament and with apparently so few safeguards written into the agreement with Mr. De Lorean.
If I add here that I am in no sense wishing to knock the project, I hope the Minister will recognise that I am trying in some small way to produce some of the scrutiny that I think should have been made available following a ministerial statement at the very beginning of this Parliament. But, be that as it may, I think it is necessary to ask a number of questions, and perhaps in doing so at least to ask whether the Secretary of State's avowed policy for industrial development in Northern Ireland is the right one.
We have already heard comments from the right hon. Member for Belfast, East (Mr. Craig) about his concern that some of the technology being introduced into the Province is much more in terms of putting things together than in developing the skills of the people. I wonder whether the De Lorean project does not to some extent fit into that category, so that at the end of the day Northern Ireland will not have acquired a new industrial skill but will have been given a more limited task.
The Secretary of State, when discussing the sort of projects that he wanted, said that he wanted to
 develop a fresh criterion completely for finding jobs in West Belfast, in Newry and in Strabane.
He went on:
 If you are going to deal with the problem fundamentally, you have got to have Government commitment. It's not the cost per job, it's the challenge before us and how we tackle it.
Certainly the De Lorean project underlines the Secretary of State's statement that the criterion is not the cost per job, because the Government commitment works out at £26,471 per job that is likely to be created. So it must be the challenge. Of course, it is a considerable challenge that the Secretary of State and his team are taking on. Quite apart from the fact that they are building a 55,000 square feet factory for the company, starting a new industry, and, as I have already said, training a whole work

force from scratch, they are hoping that by this expenditure, by this Government commitment, they will create a new industry in which 2,000 people will find employment.

Mr. Stan Thorne: I am trying to follow the hon. Gentleman's argument. He indicated earlier that he had some doubt whether the establishment of this factory would prove to be a going concern because there was a lack of skill among the labour force and a lack of experience in the production of motor cars. He then went on to argue that no new skills were being provided. Surely, if the first is true the second cannot be true, for when the project has been established and there is a trained labour force producing motor cars the people concerned will have obtained certain new skills. Is that not the case?

Mr. McNair-Wilson: Had the hon. Gentleman been following the exact train of my argument—or perhaps I expressed myself badly—he would have heard me refer to the remarks of the right hon. Member for Belfast, East—I do not think that the hon. Gentleman was in the Chamber when the right hon. Gentleman spoke—and ask whether the doubt that he cast on some of the new projects being introduced into Northern Ireland would produce the high industrial skills on which the Province's future would depend. I wondered whether the De Lorean project would be in that category—no doubt the Minister will tell us—or whether it will be a nuts and bolts job. It is a matter of great concern to the Province as to which it is. I wait to hear the Minister's view. If the hon. Gentleman will bear with me, he will hear me develop the point a little more fully than I have hitherto.
The Secretary of State has taken upon himself a considerable challenge. He has also taken upon himself a high-risk challenge. That point was made clearly by the Minister of State in two television programmes which I saw, in which he was asked whether the venture could be described in those terms. In one programme he described it as "risky" and in the other as "high risk ".
But Mr. De Lorean was there before him. As the Minister knows, in the prospects which Mr. De Lorean filed


with the Securities and Exchange Commission in the United States of America, there is this statement:
 Only investors who can afford a total loss of the minimum investment of $25,000 should apply.
That may not sound a large sum when investing £52·8 million of other people's money, but it is a warning to those who might be tempted into a risky investment. Clearly, Mr. De Lorean felt that it was worth putting those words in his prospectus.
If I had read those words, and if I were one of those responsible for this investment of £52·8 million of other people's money, I should have heard the alarm bells ringing. I should have wanted to be sure that the investment that I was about to make was as copper bottomed as I could make it. Therefore, I hope and pray that that desire for assurance was in the minds of the official of the Department of Commerce, of the Northern Ireland Development Agency and of the Northern Ireland Office when they agreed to place so much money in Mr. De Lorean's hands.
I then find myself asking: if they were seeking that assurance—surely they must have been—why did it take only six weeks for them to decide that this was the basket into which they wished to out so many of their eggs? Indeed, the Belfast Telegraph, only 13 days after Mr. De Lorean first met the British Government, was able to say that a massive new factory was to be built in Belfast. How did it know? Did it guess? Did it pick up a rumour? Or had some little bird flown its way and said "The Government are on to a good thing. This is what is likely to happen "? I do not know. I hope that the Minister will tell the House why only six weeks elapsed before the Government were prepared to hand £52·8 million to Mr. De Lorean.
I then find myself asking: granted that there were only six weeks, would it not have been reasonable in those six weeks to have an independent feasibility study carried out by someone other than Mr. De Lorean into his project? Would not that have been a fairly basic safeguard to adopt before spending so much money? But apparently the Government believed that such feasibility studies as had been

carried out were adequate for them to make their decision.
As the Government know that Mr. De Lorean has had this project on the go for nearly five years, that he has been to many other places with it, that the Puerto Rico and Eire Governments fought shy of final involvement—and both were offering considerably less than our Government—why after only six weeks and no independent feasibility study did they feel so sure that they could commit quite so much money?
There is then the worrying factor—the one that I must express—that, having given the money, the Government had to ask the Lotus car company of Norwich to step into the transaction, apparently to do some fairly major engineering on the project and to assist with the creation of the production engineering in Belfast. I understand that Lotus is to make some pre-production prototypes and to test them. Does the involvement of Lotus suggest that the original car, the DMC 12 which Mr. De Lorean put before the British Government, was a sound and viable machine, or does it rather suggest that although the car looked good in engineering terms it did not quite measure up to what was needed and, therefore, a skilled car manufacturer such as Lotus —it could have been another company—was required to get the engineering right and so make the whole project viable?
Such information as I possess is totally unable to give me the sort of answer that I want. The Minister may say that, when negotiating, Mr. De Lorean told them that he would need the help of another car manufacturer. If that is the case, clearly my doubt and concern do not exist. But if it is not the case there must be doubt about the whole project, and it is a sort of doubt which I should have thought the Government would want to get out of the way before committing quite so much money.
Having referred to the unreasonable haste of the Department of Commerce and the Northern Ireland Development Agency in entering into this project, if The Guardian is to be believed, in the teeth of Treasury opposition to it, and bearing in mind comments in the national press which, to say the least—the Minister will know this as well as I do—are sceptical about its success, I wonder why the Government feel that they can wait 30


years to get their money back. No doubt the Minister will be able to tell me on what their plans are based and why the Government are so sure that this is a winner.
I hope and pray that this sports car project will be the success that at least its backers say it will be. I say that for two reasons: first, that the creation of a new industry, albeit a nuts and bolts one, in a Province which has such a high unemployment rate must be to the good of those people, and, secondly, that the sum of £52·8 million has been earmarked for that project which might have been spent on other projects, such as the one referred to by the hon. Member for Antrim, North (Rev. Ian Paisley).
I feel that I must pose a number of questions to the Minister. I do not know whether he can answer them, but if he cannot perhaps he will do me the courtesy of a written reply. My questions are fairly limited. They are simply to ask how many of the 400 dealers—that was the number that Mr. De Lorean claimed he needed to sell the car in America—have been signed up and how many firm orders have been obtained for the car. Can the Minister say how far the Government's financial assistance will carry the project if sales are slow to materialise? Can he say what percentage of the car's components will be British-made? Is he satisfied that the car will not damage sales prospects for British-made sports cars? Can he tell me who is to undertake the personnel training of the work force? Lastly, is the factory equipment likely to be purchased in the United Kingdom?
If one felt that a large share of this £52·8 million was, in one way or another, to find its way back into British industry, one might feel that the risk was not quite as considerable as it seems at the moment. No doubt the Minister will be able to satisfy me on these matters either tonight or later.

9.35 p.m.

Mr. James Kilfedder: No doubt the Under-Secretary will be present on Wednesday at the opening of the new road between Quarry Corner, Dundonald and Newtownards, in my constituency. Perhaps, instead of return-

ing to the delights of his Stormont home, he might take the opportunity of driving from Newtownards to Millisle and from Newtownards to Portaferry, and on other roads in my constituency, so that he may find out for himself, at first hand, the deplorable condition of the roads. If he drove over those roads, I am sure that he would find reason to complain, as do many of my constituents who have to travel on them every day.
Much has been said in this debate about energy supply and the cost of electricity, coal and gas in Northern Ireland compared with the cost in Great Britain. I have often protested before about the financial burden placed on ordinary people in the Province, where the average wage is lower than that in the rest of the United Kingdom. Seemingly it is no use complaining to the Under-Secretary and the other Ministers in the Northern Ireland Office. They do not have to pay for electricity, coal or gas for heating their Stormont homes. They never see such a bill. Therefore, they cannot understand the hardship that has been endured by so many Ulster people as a consequence of the high price of fuel and lighting.
In addition, the rents of many people in private housing in Northern Ireland are now being pushed up. People on limited incomes, though thrifty enough to save and not be, therefore, a burden on the State, find that their rents have jumped. For instance, in one case the rent has increased from £55 to £320 a year—a colossal jump. The right hon. Member for Down, South (Mr. Powell), on behalf of his group, welcomed the rent order when it was debated in Committee, but I hope that he and they now realise the difficulty that rent increases present to many people, particularly retired people.
I know of one case—and it is only one of many—of a lady who is 84 years of age living on her own. The rent of the home in which she has lived for a very long time has been increased from £26 a year to £213 a year, not including rates. She has no bath in her house and there is only an outside lavatory, and little or no work has been done on that small house. No wonder she is pathetically upset about the situation. Her rent has suddenly taken a tremendous leap. This is an unfair and intolerable burden on people in Northern Ireland who have


lived virtually all their lives in one rented house.
I now turn to education, Class VIII. The Secretary of State has not yet made an announcement about his plan to encourage 16 to 19-year-olds to stay on at school rather than join the unemployment queue. I have urged this for some time—indeed, before it was suggested in England. Such an announcement was made in England, where the scheme is to be confined to areas of special deprivation and social need. All of Northern Ireland, on the basis of the Government's own reports and those of bodies such as the Supplementary Benefits Commission and the Housing Executive, is an area of special need, and such a scheme should be introduced immediately to help young people between the ages of 16 and 19 in the Province.
The chief officer of the Western education and library board has claimed that the present clothing grant for school uniforms is not large enough. The amount has not changed for six years and is only £15. No one is likely to find a school uniform for sale for that sort of money nowadays, and it is time that the amount was increased. If a school insists on its pupils wearing uniform, the education boards will have to step in with a clothing grant that is reasonable to help those families who cannot afford the cost.
Not enough priority is given to the training of engineers and applied scientists for productive industry in Northern Ireland. The technician-engineer has a vital part to play in the manufacturing and service industries in the Province. We are constantly hearing of the low standard of recruitment to industry in general and to management in particular, yet too few of the many courses available in Northern Ireland are oriented towards manufacturing industry and fewer still are specifically directed towards the needs of the industrial manager. Special financial incentives may have to be offered to attract the best of the fifth-formers and sixth-formers into undergraduate and postgraduate engineering courses of direct relevance to industry.
In Northern Ireland we have a microcosm of British industrial society. We have about 75 companies with over 500 employees, and five of these have over 2,000 employees each. In addition, we have the nationalised industries of elec-

tricity and transport, gas undertakings, harbours and airports, and every year a number of young men and women enter those enterprises. But during the present trade depression perhaps these enterprises cannot take on any more than they are doing. But times will change, trade will improve and there is hope, despite the many Jeremiahs and their dismal predictions about the future of Northern Ireland. The ordinary undergraduate grant is not sufficient to attract enough good students into industry-based courses.
What is needed is a higher maintenance element in the ordinary undergraduate grant. Education is a transferred service under the Government of Ireland Act and the Northern Ireland Constitution Act 1973, although after some of the recent antics of Ministers at the Northern Ireland Office Ulster people might be forgiven for thinking that it was the responsibility of the Department of Education and Science in London. Therefore, there is no legal reason why Northern Ireland engineering students should not be given a bigger grant than other students. I should like to hear from the Under-Secretary of State tonight that the Government will help in this way.
I regret that the distinctive contribution which technical colleges could make in towns throughout Northern Ireland—Londonderry, Coleraine, Portadown, Lisburn and Newtownards—seem to have been curtailed out of fear of reducing the number of students at the Ulster polytechnic. Perhaps the contribution to technical education at the advanced level that the technical colleges are well equipped to provide but are not providing could be examined by the committee of inquiry into higher education.
The future demand for trained and well-qualified manpower should be looked at now. Certain figures have been worked out for the demand for teachers for the next 10 years. The time has come when the Government and industry, working together, should be planning the numbers of skilled manpower for Northern Ireland industry for the 1980s.
The order refers in Class II to
 assistance in respect of certain sandwich courses ".
That is in the expenditure of the Department of Manpower Services. The sandwich course has been a successful feature


of technical training in Northern Ireland. We now have sandwich courses at the more advanced levels as well. The great difficulty today is in finding places in industry for the sandwich course student. Industry in Northern Ireland has responded well to the call for work experience in the job creation programmes and the youth opportunities programmes. However, industry's response to the much more important call for more sandwich course places has been less good. I should like to hear from the Government tonight that they intend to help in this matter so that we prepare the young people to help bring greater prosperity to Ulster in the very near future.
Perhaps the burdens of three years of strict pay policy have reduced the attraction of industry for the technologists and the scientists. Certainly they have been leaving Northern Ireland in considerable numbers in recent years. That is no credit to the present Government or their predecessors, who are also responsible for not keeping these valuable people in the Province.
It is no mere chance that the aircraft firm of Short Bros. and Harland had a poor response to its advertising for 350 technicians recently. Apparently, there are very few to be found in Northern Ireland, yet they used to be there in large numbers. The Lockheed Corporation, in the United States and Canada, took many of them 10 to 15 years ago, when the aircraft industry first started to go downhill in Northern Ireland.
Many of the difficulties can be traced to the heavy burden of taxation that Northern Ireland has to support. The management of industry must be released from being left with too little of the profits that industry makes to invest—I do not mean to go just into its pockets —in the training of the technicians of the future. If Northern Ireland industry is to provide for the future, it needs to have more control of its funds to stimulate experimentation and innovation. Northern Ireland industry must plan now for the creation of wealth for all in Northern Ireland tomorrow.
The South-Eastern education board has decided to build a new headquarters at Newtown Breda. No mention is made in the order of the capital cost. Perhaps the Under-Secretary can assure us that

the money will be made available so that this necessary work can go ahead as quickly as possible. It will take some time to design the building. I hope that it will be worthy of the board and of the region. We do not want to see buildings of the low standard that already exist in Northern Ireland, buildings put up in recent years, such as Dundonald House, which is a disgrace, and similar places. We want buildings that can match the attractive and sound buildings that were built when Ulster was first created.

9.50 p.m.

Mr. J. Enoch Powell: Like the lot of the policeman, the lot of the junior Minister to whom it falls to reply to a Northern Ireland (Appropriation) Order debate is not a happy one. I have been reflecting on some of the reasons for this as I have sat during the last two and a half hours watching the Under-Secretary of State under the steady hail of scores of questions, some detailed and some less detailed, of the majority of which he could not have had any notice. Some of them, if I were not absolutely confident of the vigilance of the Chair and of those who advise it, I would have assumed lay outside the scope of the order—

Mr. Speaker: Was this before I returned to the Chair? If it was after, I plead guilty.

Mr. Powell: As a matter of fact, it was before you returned to the Chair, Mr. Speaker. We say, and technically this is correct, that for Northern Ireland the debates on the Appropriation Order are the equivalent of the Consolidated Fund debates for the United Kingdom as a whole. But in fact our debates on Appropriation Orders must serve several more purposes than those served by the debates on the Consolidated Fund.
Our debates are made to serve the purpose of Supply Days, on which individual major subjects can be raised deliberately on the choice of the Opposition and can be debated consecutively and with a considered reply at the end. To some extent also these debates must replace—and the hon. Member for Nottingham, West (Mr. English) and the hon. Member for Harborough (Mr. Farr) brought out this point—the examination which is given


to Estimates in the Sub-Committees of the Expenditure Committee. Also we tend in addition to use the appropriation debates sometimes for asking questions of so detailed a character that they do not differ from Questions put down for Oral or Written Answer.
Is there any way of escaping from the unastisfactory character of these debates, valuable though they are in other respects, and much as we would regret losing the opportunity and the time?
First, we must find a way in which both sides—Government and Back Benchers—can have more notice of the fact that such a debate is to take place on a particular day and of the subjects intended to be covered in any detail. The fault lies partly with hon. Members and partly with the arrangement of the business of the House, which from time to time springs an appropriation debate on Northern Ireland Members at five or six days' notice. Many of the detailed matters which we raise by parliamentary Questions are known to the Minister and his Department two weeks before. In the context of these debates we have the absurdity of questions being fired across the Floor of the House, for which there is no possibility of the Minister obtaining an answer there and then. Although answers are most sedulously given in written form, a written answer by way of letter addressed to an hon. Member is no substitute for an answer given across the House, where it can be heard by all who are interested and can be considered on its merits.
We must also develop the other resources. We must see how Northern Ireland Estimates can be brought within the scope of the Estimates Committee. We must ensure that the accounts which in Great Britain are examined by the Comptroller and Auditor General, and thus fall within the purview of the Public Accounts Committee, are in Northern Ireland subjected to the same sort of examination and not to mere private auditors as happens in some cases.
In this debate we have to some extent concentrated upon the major subject of energy supply in Northern Ireland. However, most hon. Members who have taken part have also raised less important matters, and I want to begin by doing the same, although my remarks relate to a

subject of which I have given precise notice in advance to the Minister. It concerns primary education and is the matter of the under-fives in the primary schools.
The present state of affairs is unsatisfactory, especially for the small and rural schools which are so preponderant in the Province. I take the example of a small primary school which has 133 children —as a matter of fact, a voluntary maintained school in my constituency. It is a four-teacher school—principal and three teachers; that is to say, on the rule-of-thumb allocation, it is a school which rates a total staff of four. Amongst the 133 children, there are 19 who are under five.
It is the pressure of attempting to give those 19 under-fives a proper introduction to their full school life which is placing an almost intolerable burden upon the limited staff of that school. If the school's intake were larger, it would be possible to follow the general advice put forward by the Department of Education that under-fives should be taken in only in the term at the end of which they will attain the age of five, so that there would be three intakes in the course of the school year. But in the school of which I am thinking, which is a quite normal case, that would result in an intake of five, nine and five respectively in the three terms. Clearly, no useful work can be done with a class which is recruited over three terms in those proportions. An attempt was made to arrange a biannual entry; but—I understand that the Department's inspectors agreed with this—even that proved to be unsatisfactory.
So we have to attempt to do what is really the work of five teachers with only four. Incidentally., I make no complaint of the necessity for the Department of Education to maintain the due ratio between staff and the number of pupils, though of course it applies that ratio only to the number of pupils over compulsory school age; that is, over five.
I raised this case, as I have done others, with the noble Lord the Minister and was glad to learn that at any rate the problem had been recognised and that there was to be a new policy. In a letter to me dated 11th October, he said:
 a policy statement will very shortly be published outlining the Government's new policy and objectives in providing services for the


under-fives, including the policy of 4-year-olds at primary schools.
That is precisely the matter that I am bringing before the House. He continued:
 Following publication, the Department will be having further discussions with the school authorities to determine the best way forward in meeting the new objectives…I would certainly expect some improvement for the 1979–80 school year.
I was gratified to learn that there was to be a new deal for the under-fives in the primary schools, but I was still in the dark as to what it was.
So I made further inquiries and engaged in further correspondence, with only this result—and I quote from a letter of 30th November from Lord Melchett, which states:
 I can only repeat that the teaching posts were allocated earlier this year "—
that is, the four teachers allocated to that school—
 in the light of the then existing policy on 4-year-olds.
Thus one policy has gone, but another has not yet come and this school and others are still coping with the consequences of a policy already superseded by a new policy which we do not yet know.
I gave the Under-Secretary of State notice of the precise point in which I was interested. If a policy statement was shortly to be issued on 11th October, we should be seeing it before long, if not already. If there is to be relief for schools coping with this problem by next September, and if there have to be discussions about detailed application in the meantime, it is high time that this policy was promulgated. It is a pity that it has not been promulgated already.
I understand that it will not be possible in the first school year to expand the teacher ratio sufficiently to cope under the new policy as well as should be possible subsequently, but we should be making a beginning. Teachers in the school that I have in mind, and others who are in like circumstances, should know by now what is to be their future and the precise manner in which they can expect to do more than at present for the school entry which will pass through their hands.
I turn to the main topic in the debate for most Northern Ireland Members, namely, the supply of energy in Northern Ireland, upon the price and availability of which, literally, everything else depends. The tripod which we have erected has three legs—gas, which was dealt with by my hon. Friend the Member for Armagh (Mr. McCusker), coal, which was the principal subject of the speech by my right hon. Friend the Member for Belfast, East (Mr. Craig), and electricity.
My hon. Friend the Member for Armagh voiced what is by now not merely a genuine but a crying complaint. The future of the gas industry in Northern Ireland has been about to be the subject of a decisive statement for nearly two years. Over and over again it has seemed to us that the Government had been about to reach a conclusion, but always that prospect has receded into the indefinite distance. We are still waiting to know whether the gas industry in Northern Ireland, which is almost expiring in obsolete conditions, is to die altogether or is to have the only vital future which is possible for it—a future like that of the gas industry of Great Britain, based on natural gas.
The hon. Member for Harborough made an interesting intervention which drew attention to the possibility that there might be proved sources of natural gas in the Irish Sea. Indeed, if that were the case natural gas would become even more the source of choice for the Northern Ireland gas industry. But the Government cannot go on waiting for something to turn up. They cannot go on waiting for all the various factors to be cleared. They never will be cleared. Constantly, new possibilities will emerge. A decision in principle on the future of the Northern Ireland gas industry cannot be put off until all is certain, for that date would be the Greek calends. We need a connection between the natural gas supply which is enjoyed in Great Britain and the gas industry in Northern Ireland. There is no other feasible solution except a pitiful pauperdom whereby the gas concerns of Northern Ireland—I think there are 13 of them, one in my constituency, in Newry —limp on from year to year in miserable conditions in which they hopelessly attempt to edge up the prices while money to make up their losses is doled out to


them by the central Government. Et simply cannot go on: it has already gone on for too long.
There is no reason why the future of the gas industry in Northern Ireland should be regarded as having a serious impact upon the importance of coal as a source of energy in the Province. Hon. Members not acquainted with Northern Ireland who heard the speech of my right hon. Friend the Member for Belfast, East must have been surprised to learn how important coal still is in the economy, and particularly the domestic economy, of the Province. They must have been surprised even more to learn that, even at the prices he quoted, coal is still domestically the cheapest source of energy for heating and cooking. In fact, an operation is now being undertaken by the Housing Executive to take out the all-electric supply in many new estates and replace it with solid fuel appliances.
This winter, many old people, many retired pensioners living in one-person houses erected by the Housing Executive and by its immediate predecessors in the last five years, will suffer severe hardships from cold because they are unable to face the electricity bills which represent their only sources of energy for heat and cooking as well as for light.
This is a dramatic illustration of the importance of coal for Northern Ireland, which will continue far into the future. Hon. Members on the Government Benches—perhaps we may expect one day to see such an hon. Member on this side of the House representing coal mining constituents; it could happen if prospecting in Mid-Ulster turns up trumps—have no reason whatever to begrudge us access for our gas industry to natural gas on the ground that it would damage our demand for coal. Our demand for coal will be stable and rising for many years to come. They need have no fear.

Mr. English: If the right hon. Gentleman means literally that side of the House, I fear that temporarily the hon. Member for Ashfield (Mr. Smith) sits on that side.

Mr. Powell: Perhaps I was thinking of Northern Ireland Members on the one side and supporters of the Government on the other. I am obliged to the hon. Gentleman for his correction.
One point which my right hon. Friend the Member for Belfast, East made has, I think, been overlooked, and I commend it to the Government for careful examination. It concerns a scheme under which special assistance with fuel costs is provided every year for people on limited means. It applied first to electricity and was then extended to gas, but it does not extend to solid fuel. I can understand that on the mainland of Great Britain this is perhaps an acceptable anomaly. It is an indefensible anomaly when applied to Northern Ireland. When we consider that much the largest number of people in those age and income groups in Northern Ireland are dependent on solid fuel heating, it is indefensible that those in identical circumstances, who are supplied with gas and electricity, receive substantial assistance during the winter quarter while the majority receive none.
The third leg of the stool, the electricity industry, has not so far been emphasised in this debate, and it falls primarily to me to say something about that. In the last few days we have received the report of the Northern Ireland Electricity Consumers Council for the year ended 31st March. It mentions that a total of £376 million was involved in a Government package which has made possible substantial reductions in the price at which electricity is supplied in the Province. In economic terms that is not quite so much as may appear, since £250 million of that is the writing off of borrowings and another £26 million is the elimination of an accumulated deficit on current account, so that, while an admirable bookkeeping transaction, this does not represent any addition to available resources.
However, the remaining £100 million will, over the five years, be applied to the reduction of tariffs in Northern Ireland. For industrial purposes the electricity tariffs will place Northern Ireland industry and commerce roughly on a competitive basis with the rest of the United Kingdom. That is illustrated in a most interesting manner in the third appendix to the report, which I hope many hon. Members will read. Unfortunately, the same is not true of domestic supply. The domestic consumer in Northern Ireland—with his lower average income, as is often stressed—is still at a


great disadvantage compared with the electricity consumer on the mainland.
There is no long-term answer here to the demand for fair and equitable conditions as between Northern Ireland and Great Britain other than physical connection. After all, it is upon the physical link that the equalisation of charges, or at any rate near-equalisation of charges, in Great Britain depends. The argument that we ought to be on fair terms in Northern Ireland carries with it the claim—I might say the demand—for a linkage between electricity in Northern Ireland and electricity in Great Britain.
I was delighted at the beginning of last week during energy Questions that, when I put this point to the Minister of State, he gave me a most forthcoming answer which I should like to put on the record. I asked him, on a Question related to electricity connection across "the Channel ", whether that included the North Channel. The right hon. Gentleman replied
 I expected the right hon. Gentleman to ask me that supplementary question.
That is a useful lead-in, because one knows that he was not giving his reply this time off the cuff but that it represents settled Government policy. He continued:
 As I said on the last occasion when this matter arose, we are looking favourably at such a proposal ".
Given the reticence which is commonly enjoined upon Ministers—and particularly upon junior Ministers—when no final decision has been obtained, if the Minister of State was willing to tell me that the Government were "looking favourably" at a proposal for a grid link between Northern Ireland and Great Britain, I think we may conclude that we are on our way. Nor was I discouraged by his concluding sentence:
 Unfortunately, we have not got quite as far on that matter as we have on the matter that is before us in this Question."—[Official Report, 4th December 1978; Vol. 959, c. 1021.]
As we had just been told that the link with France will come into operation in

stages, the first in 1982 and the second in 1983, I think that we may look forward, by the middle of the 1980s, to the realisation of the only rational arrangement—namely, the embodiment of Northern Ireland in what will then be the United Kingdom electricity grid.
This will not be a one-way benefit. We have in Northern Ireland a new power station, which is not yet completed, which at present is fuelled for the most part by oil, although that could, if necessary, be adjusted. The station will have a capacity much beyond anything likely to be demanded in the foreseeable future by Northern Ireland. It would be a valuable asset to the electricity supply of the United Kingdom as a whole, if one could have on an adequate scale a two-way traffic, as it were, between generation in Northern Ireland and consumption in Great Britain, and vice versa.
I am not saying that the reference made by my hon. Friend the Member for Armagh (Mr. McCusker) to the sale of electricity to the Republic is unimportant. But I believe that our big sale should be in Great Britain. Our prospect of equitable conditions and of realising in this respect, as we are realising in others, our birthright as part of the United Kingdom, depends upon that link.
It is a little too much to hope that the Minister will be able to make the announcement tonight. However, we should be able to look forward to an early announcement which will give us the assurance of that electrical link, which, I believe, will be followed by a gas link, between the energy consumption in the Province and that in the United Kingdom.
So the same theme runs through this debate from the procedural observations with which I began to my conclusion on the subject of energy. It is to the full realisation of its status as an integral part of the United Kingdom that Ulster looks both for fair treatment and for prosperity.

10.18 p.m.

Mr. Philip Goodhart: When this draft Appropriation Order was first tabled for debate, many economic experts were predicting that the Government of the Irish Republic would have joined the European monetary system at last week's Brussels meeting of Heads of State of the EEC. The same experts were predicting that the United Kingdom would stay outside. As we all know, Mr. Lynch's Government have decided, for the moment, not to join.
This is not the time to discuss the theoretical long-term impact of EMS, although I think that it might be in order for discussion under class II of the Ministry of Commerce Vote. However, this saga is not yet finished. The discussions continue, and we must still consider the practical implications of a split between sterling and the Irish pound.
There can be no doubt that the administrative impact on firms in Northern Ireland undertaking substantial trade with the Republic could be considerable. I have taken the opportunity to study a paper prepared by Mr. Poldermans, of the Investment Bank of Ireland, which is being circulated as widely as possible by the Northern Ireland Chamber of Commerce and Industry. I wish to quote from one of its 14 complex paragraphs outlining the administrative problems which arise in Northern Ireland when and if there is a currency divorce between North and South.
Mr. Poldermans tells firms:
 All existing invoices, confirmation of order forms, tender bids, receipt books, quotations, terms of trade, price lists, etc. should be checked for references to currency.
Clearly, the administrative problems are immense. The Northern Ireland chamber of commerce has suggested that the Government should institute a study of the implications of a possible currency split. It is suggested that Mr. T. S. Wood, who recently advised the Expenditure Committee on the EMS, might well be a suitable expert to undertake that study.
Fortunately, however, that is a problem for the future. The main economic problem facing Northern Ireland today has been summed up briefly and bluntly in the first report of the Northern Ireland Economic Council:

 Northern Ireland remains heavily dependent upon industries which are more likely to contract than to expand their workforce "—
which means textiles and shipbuilding, which means Harland and Wolff.
My hon. Friend the Member for Harborough (Mr. Farr) pointed out that Harland and Wolff had not produced its report and accounts for last year. I think that I can understand the reason. It is difficult for the company to produce a sensible report and accounts while there is still a dispute about payment for the two great tankers which are now lying in Loch Striven while the Coastal States Gas Corporation of the United States refuses to accept them. Plainly, that state of affairs cannot be allowed to continue for much longer, and I hope to hear from the Minister how soon one may expect the dispute to be resolved and how soon Harland and Wolff will be able to produce its accounts, since, clearly, this is a matter of fundamental importance.
Meanwhile, I entirely support the plea put by my hon. Friend the Member for Abingdon (Mr. Neave) when he urged that Harland and Wolff should receive some defence contracts. In particular, he drew attention to the fact that Harland and Wolff has an excellent refit capability which, alas, is grossly underused. One of the reasons for the underuse of that refit capacity lies in the fact that foreign crews and ship owners have been frightened away by the reports of terrorist outrages. How appropriate, then, it would be if HMS "Kent" and HMS "Fearless ", both built at Harland and Wolff, should now be refitted there.
There is another reason why the Ministry of Defence should be particularly generous in its approach to Harland and Wolff. In the last defence cuts but three—it may have been the last but four—the then Secretary of State for Northern Ireland acquiesced in the removal of five defence establishments and some 2,000 defence jobs.
In a remarkable article on 18th June 1978 The Sunday Times suggested that the removal of those 2,000 jobs was part of an under-cover deal with the IRA and that that was a signal given to the men who were then negotiating with the Secretary of State for Northern Ireland that


Britain intended in the long term to withdraw. I do not repeat the allegations made by The Sunday Times. However, Northern Ireland has not done well from the Ministry of Defence as regards civilian jobs. Therefore, I hope that it can look leniently at the refitting of the two warships at Harland and Wolff.
As every hon. Member from Northern Ireland has done, I wish to refer to the problems created for Northern Ireland consumers and Northern Ireland industry by the high cost of energy. As the hon. Member for Armagh (Mr. McCusker) has said, gas is three times as expensive in Northern Ireland as on the mainland. The right hon. Member for Down, South (Mr. Powell) has reminded us that electricity is substantially more expensive for non-industrial and non-commercial consumers in Northern Ireland than in the rest of the United Kingdom.
The whole tone of the debate and the whole tone of the report on energy policy produced by the Northern Ireland Economic Council are avowedly integrationist. They look towards the closest physical and financial links with the electricity and gas industries in the rest of the United Kingdom.
I find it difficult not to sympathise with the arguments that have been deployed so ably by right hon. and hon. Members from Northern Ireland. I personally find them exceptionally convincing. On the other hand, there is some argument on costs. The hon. Member for Armagh suggested a cost of £50 million for the undersea pipeline and the other conversions. As the hon. Gentleman noted, and as I am sure my hon. Friend the Member for Newbury (Mr. McNair-Wilson) noted, that is a sum that is somewhat less than that which the Government are committing to the high-risk project of the De Lorean sports car. There are, alas, other estimates of the total cost.
Two years ago, the British Gas Corporation made a study of the costs. Its estimate of the cost of connecting the pipeline and carrying out the conversions that would be necessary amounted to no less than £162 million. As I understand it, that figure has been confirmed to a friend of mine today by the British Gas Corporation.
There needs to be further clarification of the costs. I hope that the Minister will clarify the issue soon. There is an enormous disparity between the Northern Ireland Economic Council, which is a responsible body, which estimates £40 million plus conversion costs, and the British Gas Corporation, which is also a responsible body, which estimates £162 million in capital costs and support costs. I hope that the Minister will soon be able to give us some clarification of the figures produced by at least semi-official bodies.
Meanwhile there seems to be less criticism of the Northern Ireland Economic Council's estimate of £60 million for the cost of a physical link with the British electricity grid system. I note that Ministers seem to show greater enthusiasm for that project—I am sure that this will appeal to the right hon. Member for Down, South—because there seems to be a good prospect of getting a substantial EEC grant for it. I should be grateful if the Minister would tell us tonight—or in correspondence if telling us is difficult—whether any preliminary discussions have taken place with the EEC in Brussels about the size, terms and timing of a grant for both the electricity connection and the gas pipeline. Clearly, until the Government have made up their mind about energy policy for Northern Ireland, it will be difficult for the economic strategy group—incidentally, we would like to know who is on the economic strategy group and whether it is to be part of the Northern Ireland Economic Council—to undertake its work on the economic plan.
Apart from the problem of depression in shipbuilding and the economic problems caused by the high cost of fuel, we have to face the economic problems created by the IRA. I have little doubt that the timing of the last bomb attacks in Northern Ireland was provoked by the Secretary of State's visit to America in search of investment. I have no doubt that IRA leaders believe that a prosperous Northern Ireland would be more of a barrier to revolution than a poor Northern Ireland.
Sadly, I note that the Northern Ireland Economic Council has had to draw attention to the fact that, for a number of years, managers have been reluctant to


come to Northern Ireland. That is particularly true of firms using advanced technology of the kind specifically referred to by the right hon. Member for Belfast, East (Mr. Craig). The administrative skills of the people of Ulster are rightly famous, but no province of 1½ million people can be expected to provide management skills across the whole technological board, however good its educational system still may be.
The morale of Northern Ireland management still remains staggeringly high in the face of terrorist attacks and economic problems. I well remember meeting a group of Northern Ireland managers just after the IRA had carried out a series of attacks on senior managers specifically designed to disrupt industry. I was immensely impressed by their evident unflappability in the face of what then seemed to be a continuing threat. Last Wednesday, this House had an opportunity to say "Thank you" to the security forces in Northern Ireland. Tonight we have a chance to say "Thank you" to the responsible trade union leaders and to the managers who have kept the Northern Ireland economy afloat in exceptionally difficult circumstances.

10.35 p.m.

Mr. Carter: The right hon. Member for Down, South (Mr. Powell) sympathised with me in my task of replying to the debate, which is something of a patchwork quilt affair. Quite apart from the legitimate matters which could be, and have been, raised, a few others have been lobbed into the arena, from rural planning to the European monetary system controversy. I do not quite know how they got in, but in Northern Ireland debates, whatever the subject, these things have a tendency to crop up.
First, in response to the right hon. Gentleman's interjection in my opening speech, I must say that he is quite right—the repeal is due to the fact that those moneys have been disposed of.
The debate concentrated itself into three principal areas, and I shall deal with those before returning to some of the minor points. I know that most hon. Members will not consider them minor points, but they will have to be in regard to my contribution. Where I cannot reply fully, or not at all, I or my noble and right hon. Friends will reply by letter.
The principal subject was energy. I have listened with great interest to what hon. Members have said about the energy needs of the Province. I assure them that their speeches will be read with great care by my right hon. Friends the Secretary of State and the Minister of State and will be taken fully into account along with the many other representations that have been made on this subject from all concerned. Hon. Members will know that an urgent review is now taking place within the Government of Northern Ireland's energy needs as a whole and that my right hon. Friend hopes to make known the results of that review as soon as possible in the new year.
It is obvious from the very different representations that the Government have received from different quarters that to decide how best to meet Northern Ireland's energy needs is no simple matter. It bears repeating that a decision about one fuel industry has implication for all the others. For example, when considering the proposal that natural gas should be supplied to Northern Ireland through a pipeline from Scotland, the Government cannot simply assess the costs and weigh them against other claims on resources, or consider whether this would be the best way from a national point of view of using natural gas. That would be difficult enough. But the Government must also look at the likely consequences for other energy industries in the Province.
In 1977, gas accounted for only per cent. of heat supplied to industry in Northern Ireland and under 5 per cent. of the domestic energy market, and to increase this market share significantly by introducing natural gas could be achieved only at the expense of other fuels.
For example, in 1977 electricity supplied about 11 per cent. of industrial and 16 per cent. of domestic needs. The capacity of the Northern Ireland electricity service is already expected to be substantially in excess of demand for many years and hon. Members will be aware that the service requires very considerable financial support from the Government to enable it to sell electricity at its current tariffs. A substantial loss of its market share to natural gas would increase the excess of electricity capacity over demand and increase the financial support that the electricity service requires.
Solid fuels, mainly oil, supplied as much as 62 per cent. of the domestic energy market last year. As a number of hon. Members and others have insisted over the past few months, the Government must take account of the likely effects of introducing natural gas on the financial position of the coal trade and on the 1,500 jobs involved in it in Northern Ireland.
I have noted what hon. Members have said about domestic electricity tariffs in Northern Ireland. These are on average about 15 per cent. higher than the average in Great Britain, although it is worth noting that there are significant variations within Great Britain, too. The Government are looking at the prices of all fuels as part of their wider review of energy needs. As I have indicated, the finances of the NIES, and, therefore, its prices, are subject to what the Government decide about the future of gas and about the best allocation of the available public resources among the different fuel industries in the Province. There would clearly be disadvantages in subsidising one fuel industry to compete with another subsidised fuel industry in the same, limited market. It would be wrong to take action on any one aspect before we have decided on our overall approach. As I have said. the Government will make their views on this known as soon as possible.
The Government are acutely conscious of the problems caused in Northern Ireland, where poverty is more widespread than in the rest of the United Kingdom, by the higher prices of some fuels. They appreciate the desire of hon. Members and of the gas industry and others in Northern Ireland for an early decision on the future of the gas industry and other aspects of energy policy. But the Government are determined to look at the whole energy picture in the Province, not just part of it, and to make quite sure that our decisions for the future are based on the most thorough consideration of all the relevant factors. I should like to assure hon. Members again that the views they have expressed today will be taken fully into account by the Government as those decisions are taken.
Another subject that was referred to by hon. Members in a variety of ways was that of commercial and industrial activity in the Province. To maintain the competitiveness of Northern Ireland's

incentives compared with those of its competitors, the Department of Commerce introduced significant improvements in its package of selective financial assistance on 1st August 1977. These included an increase in the maximum rate of capital grant on buildings, machinery and equipment from 40 per cent. to 50 per cent., an increase in the period for rent-free occupation of Government factories from three to five years, and the raising of the maximum period for the highest level of interest relief grant from two to three years.
Other Government initiatives taken to stimulate industrial development include measures to enable the Northern Ireland electricity service to reduce its industrial and commercial tariffs to bring them into line with those in the rest of the United Kingdom, and a new scheme of grants towards the cost of research and development projects. This current year has seen a step up in the campaign to re-establish Northern Ireland as an acceptable location for mobile international investment. The Department's overseas industrial promotion campaign has been significantly expanded with additional manpower, increased publicity, increased encouragement to inward investment missions and overseas promotional tours by Ministers
The recent announcements that four major American companies—AVX Corporation, General Motors, the De Lorean company and Coronary Care Systems—propose to set up new plants in Northern Ireland which will provide employment for approximately 3,500 workers, together with the earlier news that the Goodyear Tyre and Rubber Company (GB) Limited is establishing a new technical centre at Craigavon to carry out research and development for its general industrial products on a world-wide basis, are seen as evidence of the progress being made in the Department's battle to secure new inward investment.
During the first 11 months of 1978, LEDU has promoted more than 1,000 jobs in Northern Ireland, bringing the total number of jobs promoted by LEDU since its formation in 1971 to over 8,000. LEDU has shown itself to be attuned to the needs of small industry in Northern Ireland and has a proven track record. After its initial emphasis towards the promotion of employment in non-urban


areas, LEDU has widened its attention to the scope for employment provision in Belfast. New staff have recently been appointed and should add considerably to LEDU's operational strength in the inner city.
The Northern Ireland Development Agency has now been in existence for over two years. In its first year of operation, a substantial part of its time was occupied in dealing with the problems of firms inherited from the former Northern Ireland Finance Corporation.
These firms have now been vested in the Department of Commerce, thereby leaving the agency free to consolidate its functions of strengthening and improving Northern Ireland industry.
Over the past year, the agency has developed a wide range of activities including the creation of a management bank to improve management expertise in Northern Ireland and the establishment of a marketing service to assist Northern Ireland companies to improve their marketing techniques. The agency is also developing its role of identifying products which could be suitable for manufacture in Northern Ireland, either through the promotion of joint venture arrangements between external companies and locally-based companies or the agency itself, or through the establishment of State industries by the agency in areas of high unemployment.
One of the companies I have mentioned, recently announced as entering Northern Ireland, is the De Lorean company. I shall reply in as much detail as I can, but if I do not cover all the points that the hon. Member for Newbury (Mr. McNair-Wilson) raised, which were of a rather technical nature, perhaps he will permit me to respond by letter.
Agreement was reached with this company for the establishment of a car assembly plant at Dunmurry, located on the outskirts of West Belfast. The assistance which is being provided, as stated in response to a Question from the hon. Member for Norfolk, South (Mr. MacGregor) on 9th November, is £28·5 million as grants towards the cost of factory construction, plant, machinery and equipment, and towards initial operating costs, together with the loan capital of £6·75 million from the Department of Commerce and 17·75 million of equity

capital from the Northern Ireland Development Agency. The plant, when in full production, will employ 2,000 workers.
Before the agreement to provide this assistance was made, very careful evaluation of the project was carried out by officials of the Department of Commerce and the Northern Ireland Development Agency, who had available to them
a very full analysis of the entire project which had been carried out by two highly reputable firms of business consultants and a comprehensive market survey carried out by specialist marketing consultants. A further report was also directly commissioned by the Department of Commerce.
On the basis of this evalution, the Government decided that the project merited a high level of support. The Government have been criticised for offering assistance to what has been termed a high-risk venture. On the basis of their evaluation of the project, the Government do not accept that description. As with all commercial ventures, there are risks of failure, but these are judged acceptable when measured up against the potentially high benefits of the enterprise.
The location of the De Lorean project is in an area which suffers from extremely high unemployment. Social surveys in the West Belfast area have indicated that about 30 per cent. of male adults and an even higher percentage of young people are unemployed. The area also suffers from an extremely high level of social need. Currently, site works are nearing completion at Dunmurry. The main building contracts will be awarded early in the new year, with final completion dates early in 1980, when production of the car will commence. Virtually all the top tier of management has been recruited, and manpower and training plans are being drawn up.
The De Lorean car is a gull wing, two-passenger sports car, which will have advanced styling and safety features and good fuel economy. In order to provide corrosion resistance, the underbody will be constructed from moulded fibre-glass reinforced plastic compounds, and the outer skin of the car will be made of brushed stainless steel.
To date, two prototypes of the car have been built in the United States, and


a recent agreement has been concluded for the further research and development work which is necesary to bring the car to the production line to be carried out by Lotus Cars Limited of Norwich.
The hon. Members for Abingdon (Mr. Neave) and Beckenham (Mr. Goodhart) mentioned defence contracts for Harland and Wolff. That is a matter for my right hon. Friend the Secretary of State for Defence, and I shall make sure that their observations are drawn to his attention.
The hon. Member for Abingdon referred to the awaited economic plan. We hope to see it published some time in the new year, when it will be the subject of debate—no doubt in the House as well as outside. The hon. Gentleman was concerned about job creation. I hope that some of what I have said about our commercial and industrial activities will have convinced the hon. Gentleman that we are determined to keep up the pressure on the jobs front.
One of the statistics that appealed to me when I was reading through my brief was the fact that, surprisingly, against the rather gloomy background of employment and unemployment in Northern Ireland, 10 per cent. more people are employed in 1978 compared with 1971. This is similar to the picture in the rest of the United Kingdom, but the harsh truth is that we are not running fast enough. We are not even managing to stand still.
The hon. Gentleman also spoke about the advantages that the Republic of Ireland might enjoy through the use of a tax holiday system. I can assure the hon. Gentleman that our package in Northern Ireland is more attractive in total than anything the Republic can offer.

Mr. Neave: The hon. Gentleman means the August 1977 package, does he?

Mr. Carter: Yes. I am talking of the situation as of this moment. All our recent improvements in capital grants and various forms of rent relief, for example. add up economically—however one produces the sum at the end of the day—to be globally more beneficial than anything the Republic can offer.
The hon. Gentleman went on to refer to certain education matters. I answer in

this House for my noble Friend. I can only stress, as I always do at Question Time, that we are seeking to go about the whole process of change on a voluntary basis. I hope that the day is not too far away when the hon. Gentleman will accept that. There is no attempt to use undue coercion. We seek to achieve this transition, which is in the best interests of the vast majority of students in Northern Ireland at the secondary stage, by voluntary means.
It is not a question of timing: we want to get the right result, and if it takes five years to achieve it, that is a price we feel worth paying if we can carry the whole community with us.
A number of hon. Members, including the hon. Member for Antrim, North (Rev. Ian Paisley), raised the subject of education. Judging by comments in this debate and others in which I have taken part, together with the erroneous questions that are asked at Question Time, I think that it might be useful if we sent a progress report to all hon. Members, letting them know of the present state of play on the whole process of transition. I shall mention that to my noble Friend.

Mr. John Biggs-Davison: I apologise for having been absent for much of the debate, owing to an inescapable commitment.
As the Minister knows, I have studied this question to some extent. I was interested that he said "if we can carry the whole community with us." Those were very important words. Does he mean that he wants to enlist the support of the whole community before proceeding in the direction of changing the system of secondary education?

Mr. Carter: It may surprise the hon. Gentleman, but the vast majority of people agree with us. Clearly, we shall not wait for 100 per cent. support. By and large, at present the teachers' organisations and parents' organisations support us. We do not have the answer completely right yet, but we are seeking to find it.
The hon. Member for Mid-Ulster (Mr. Dunlop) and the hon. Member for Antrim, North raised the question of small hospitals. I cannot go into this subject in great depth tonight. It is a subject of continuing controversy. My noble Friend is prepared to listen to objections


and views, and I have no doubt that if a delegation is sent to meet the Secretary of State, he will be prepared to see it.

Mr. McCusker: The Minister will appreciate that in both of these matters—education and hospitals—there is a difference between consultations with boards that are not elected and are riot responsible to anyone and consultations with elected representatives. I suggest that more heed should be paid to elected representatives, whether they are councillors or Members of Parliament.

Mr. Carter: I am always prepared to meet Members of Parliament and councillors and listen to their views. But one must weigh those views against other considerations. I shall pass the hon. Member's comments on to my noble Friend.
The hon. Member for Harborough (Mr. Farr) raised, among many points bound up with energy, the publication of NIDA statistics and accounts. I am sure that there is no attempt to be secretive. If we can improve the quality of the accounts, we shall try to do so.
My hon. Friend the Member for Nottingham, West (Mr. English) raised the problems associated with a debate of this kind which runs hot on the heels of a similar debate last week. I shall pass on his views to the Secretary of State, but he must realise that Northern Ireland business is at present debated in a unique way, and no one can be entirely happy with it. We seek to improve it.
I was unhappy to hear the hon. Member for Antrim, North advising people to break the law on the question of electricity bills. We have enough trouble on our hands in the Province as it is without Members of Parliament stalking around Northern Ireland and adding to it. The hon. Member referred to the question of non-payment of bills, which desperately concerns us all. He should know that we are now cutting off people at the rate of 400 a month. Therefore, it is mischievous of him to accuse the Government of not being prepared to take action. We are taking action, and I would hope that we would carry every Northern Ireland Member with us in attempting to deal with this problem in a constitutional way. It is outrageous of the hon. Member to urge people to break the law. I hope that he will reconsider.

Rev. Ian Paisley: Is the Minister saying that his Department is asking people to pay money that they do not owe? If a person wants to thieve from me, I shall resist that attempt. This payment is not due and the Government are asking people to pay something for which they are not liable.

Mr. Carter: The hon. Member is trying to crawl away from the mess he has created. He did quote one constituency case in which someone might have been given a bill inadvertently that he should not have received. That sort of thing happens in all our constituencies. The general point that the hon. Member made about people not paying is disgraceful.

Rev. Ian Paisley: It is thieving.

Mr. Carter: The hon. Member asked also about the members of the curriculum board. I shall write him a letter giving the information that he seeks.
The hon. Member for Down, North (Mr. Kilfedder), in a rather cool and considered contribution, for a change, dealt with the difficulty that we are experiencing in Northern Ireland of not being able to obtain the number of professional and skilled people whom we need to administer and run the community. It is a problem which concerns both private industry and public departments. For once, the hon. Gentleman hit the nail very firmly on the head. We in Government are extremely concerned about our inability to attract into Northern Ireland and to generate within Northern Ireland professional and managerial people of the right quality and quantity.
The right hon. Member for Down, South asked about the under-fives. The Government's concern about the level of educational and social welfare for the under-fives in Northern Ireland is reflected in their policy document "Day Care and Education for the Under-fives in Northern Ireland." It has now been published. The document sets out a number of proposals as part of a new approach to providing services for the under-fives evolved after widespread consultation with all the relevant interests in Northern Ireland.
On the education front, the Government have reaffirmed their policy to provide nursery education for all those children whose parents wish them to receive it.
The initial programme will more than double the number of places in nursery schools and classes in the next five years, and school authorities will be encouraged to convert spare accommodation in primary schools for nursery education. This programme of positive action is required immediately in Northern Ireland, where existing provision falls below the average for the rest of the United Kingdom.
The right hon. Member also asked about four-year-olds in primary schools, about which he has been corresponding with my noble Friend. There has always been a very high proportion of four-year-olds in primary schools in Northern Ireland—at present, about 70 per cent. of this age group. When one takes account of this, together with nursery places available, one sees that the overall education provision for three and four-year-olds in Northern Ireland already compares favourably with the rest of the United Kingdom.
The Government recognise that the facilities, staffing and activities provided for four-year-olds in primary schools should be broadly similar to those available in nursery schools. These are matters which will be discussed in detail with the education and library boards and they are dealt with specifically in the policy document.

Mr. Powell: Does that mean that four-year-olds in primary schools will in future be taken into account in assessing the staffing needs of those schools?

Mr. Carter: I thought that I said we would seek to provide in those schools where we were catering for three and four-year-olds facilities which would be provided in nursery schools. I assume "facilities" to mean staffing, too. However, I or my noble Friend will write to the right hon. Member confirming or denying that.
The right hon. Member also asked about gas. To some extent, I dealt with that in that part of my remarks concerning energy. I thought that it was a bit unfair—even uncharitable—of him to say that we had not done very much about gas. In fact, we have written off £3 million of debt this year to keep the supply going. Although we might be said to be

marking time, those people who currently are receiving gas have been assured of a continuing supply until a final decision is made.
The right hon. Member referred to the policy that I have been promoting in the area of public housing of converting houses away from electricity and gas to coal. The right hon. Member is very much in favour of that, as are people generally in Northern Ireland. Of course, people are in favour of natural gas as well. In a sense, I suppose that life is a matter of constant conflict. We are in some difficulty in Northern Ireland because people demand that which, from a Government view, has onerous public expenditure consequences.
Almost every hon. Member on the Opposition side has, at some time, urged the Government to cut public expenditure throughout the United Kingdom. I have no doubt that the right hon. Member for Down, South, who has taken a keen interest in these matters, would want us always to be mindful of public expenditure consequences.
The hon. Member praised managers to entice me into a discussion on the European monetary system. I shall not be tempted. He also referred to tankers which are at present the subject of arbitration. I cannot go further on that at present.
The hon. Member also asked about the Royal Navy. He asked why it did not use the facilities in the Harland and Wolff dockyard. I shall draw that matter to the attention of the Secretary of State for Defence.
The hon. Member praised managers for keeping the Province going. I join with him in that, but equally the common man and woman in Northern Ireland should be praised for maintaining, in the face of appalling violence and destruction, a fairly civilised and fairly stable society—contrary to what people outside might think. I hope that this order will make a further contribution to stability in Northern Ireland.

Question put and agreed to.

Resolved,

That the draft Appropriation (No. 4) (Northern Ireland) Order 1978, which was laid before this House on 23rd November, be approved.

NORTHERN IRELAND (SHOPS)

11.6 p.m.

The Under-Secretary of State for Northern Ireland (Mr. Tom Pendry): I beg to move,
That the draft Shops (Northern Ireland) Order 1978, which was laid before this House on 22nd November 1978, be approved.
The purpose of the order is to provide for six-day trading in Northern Ireland as in Great Britain. It amends the Shops Act (Northern Ireland) 1946 to allow district councils to exempt traders from the early closing day. Under this Act shops are required to close on one weekday in each week not later than one o'clock in the afternoon. Under the revised legislation, a district council would be able to exempt all shops within its district or to limit the exemption to a specified part of its district or to shops of a specified class.
Elsewhere in the United Kingdom local authorities already have this discretion—under the Shops Act 1950—and the proposed order will, therefore, merely have the effect of bringing the law in Northern Ireland in this matter into line with that applying in the rest of the United Kingdom.
Requests for this change in the law have come mainly from the representatives of the large Belfast city centre stores which see six-day trading as essential for the economic and social development of Belfast. I share this view. I have no doubt that the proposed order will make a worthwhile contribution towards the revitalisation of the commercial heart of the city—to which my ministerial colleagues and I are already fully committed. I should add, however, that this change in the law will be welcomed not only in Belfast but in many other areas throughout Northern Ireland, where the existing law is regarded as being unnecessarily restrictive.

Rev. Ian Paisley: Does this mean that one of the days could be Sunday?

Mr. Pendry: I shall come to that question later. I am sure that it is on the minds of others in the Province.
I realise that the order causes some trade union anxiety. In advocating the

measure I have been concerned to ensure that the interests and rights of shop-workers should be safeguarded fully.
With this in mind, two ministerial meetings took place—one in August last year and another in August this year. At those meetings the Government's proposals were explained in detail to the local representatives of the Union of Shop, Distributive and Allied Workers.
The union, for its part, outlined its concern that the introduction of six-day trading might upset existing arrangements for a five-day working week which was in operation in most of the large stores. My Department therefore consulted the various bodies representing traders in Northern Ireland—the Northern Ireland Chamber of Trade and the Northern Ireland Chamber of Commerce and Industry. As a result, firm assurances were obtained from these bodies that existing arrangements would be honoured and that, in implementing six-day trading, the interests of shopworkers would be fully respected by their members. I have no reason to doubt these assurances, but I stress that other important statutory safeguards already exist.
In the first place, the order will not affect in any way the existing statutory entitlement of shops' employees to a weekly half holiday. Secondly, the prescribed procedures under the statutory order which applies and under which district councils will be able to grant exemptions from the early closing day requirements ensure publicity and opportunity for representations to councils to be made and to be taken into account before a district council makes its order—so that all interested parties, not merely the traders concerned but also employees and others to be affected by the introduction of six-day trading, will have their say. Finally, a district council's proposal to introduce six-day trading must have the agreement of the Department of Finance for Northern Ireland before it can be effective.
It is fair to say, therefore, that every consideration has been given to the assurances given by the traders and to the statutory safeguards which already exist. that the unions' fears are not well founded and that, as in the rest of the United Kingdom, it should be possible for em-


ployers and employees to make acceptable arrangements for six-day trading where this is required.
In answer to the hon. Member for Antrim, North (Rev. Ian Paisley), I would say that my Department initially considered wider aspects, including Sunday trading and late night closing, but they were decided against because there was not a great feeling for them. They were considered, and rejected.
Hon. Members will already be only too well aware of the serious difficulties which shop owners have had to face in Northern Ireland as a result of the sustained campaign of bombings and other forms of terrorist attacks. One must admire the courage and resilience of those who have suffered in this way. Despite in many cases serious injuries and loss of life and the repeated destruction of or serious damage to their premises, traders have persisted in their efforts to recover and to re-establish their businesses.
I am sure that hon. Members will wish to support and to encourage such efforts in every way possible. The proposed order will assist in no small measure by allowing flexibility in the law on this matter of early closing at the discretion of local councils. I commend the order to the House.

11.12 p.m.

Mr. Philip Goodhart: I understand that there has been wide consultation about the order in Northern Ireland and that it is generally welcomed. Certainly it corresponds with my party's belief that local issues should be settled by local people who know the local conditions.

11.13 p.m.

Mr. Wm. Ross: Early closing or half-day closing in Northern Ireland has long been a feature of life in the Province. The order brings in its train a number of hopes that I can only call pious. I rep-et that the Minister has had to open his career at the Dispatch Box with such an order. He deserves something far more substantial.
The "road block" provision in article 3 is meaningless. No council in Northern Ireland will have the guts to stand up and defend the workers in the shops —and it is about them that I am con

cerned. That road block will be swept away at the first request from any shopkeeper in a particular town or village.
The order is nothing more or less than the product of greed for extra profit. That is very sad, because that extra profit does not exist. There will be no increase in total turnover. There is only so much money for the necessities and luxuries of life on the present trading days. Once one shop in a town opens, they will all have to open, because they are in competition.
So what effect will the order have? If it does not affect the total turnover and profit, it can only affect the distribution of money among, the shops. In the long run this can only mean price increases arising from increased labour costs. Either extra staff must be taken on or overtime worked, and that will he extremely difficult on the small man.
I took careful note of the Minister's opening remarks. He said that the order arose mainly because of pressure from the large Belfast concerns, and he is dead right about that. It is natural that pressure for it should come from that source. The large concerns carry a lot of staff. They can operate a five-day working week for their employees with six-day opening. It is probably worth their while to press for this order, because they can reap any benefit resulting from it. The hardship will fall entirely on the small businesses run by one, two or three men, businesses that exist extensively throughout Northern Ireland. Those businesses have already suffered at the hands of the large multiple stores. They are a happy feature of life in Northern Ireland.
The order is a mistake. It will increase the proportion of sales made from large stores at the expense of their small counterparts. The present system has worked very well to the benefit of the small business man and his employee. By this order we are sweeping away a system that has served us so well, and we are doing so for no good purpose. I regret it.

11.17 p.m.

Rev. Ian Paisley: I am glad that the Minister made it clear that the order will not pave the way for Sunday opening in our Province. I am glad, too, that he realises the strength of feeling there against such a proposal, and that he made that clear.
I wish to say a word on behalf of the workers, from whom I have received representations. They feel that their best interests are not served by the order. They also feel strongly that more obligations and onerous duties could be placed upon them as a result of it.
The hon. Member for Londonderry (Mr. Ross) was right when he said that in a large establishment with a large work force times can be juggled and working days can be changed. The change, however, will be made by the manager of an establishment, not at the behest of the workers. If a manager feels that staff should work a particular rota and then finds that that rota does not work out, he will tell the staff to work a different system. That prospect is causing serious concern among the working people. At present they know the five days that they have to work. They know which days they have off, and they know which day of the week is for early closing. They arrange their lives according to that pattern. But in the large establishments all that will be changed.
Another matter that concerns me is the representations that led to the order being laid. We were told in our press that certain big business interests had complained that because of terrorism they felt that there was inadequate time in which to conduct their business. They therefore felt that they should be allowed to open on an extra day. I do not think that that is justified.
The hon. Member for Londonderry is nearer the mark. The big business interests can see that if they are allowed to open for longer periods than the small business men, the small business men will go to the wall. The customers who would naturally shop with small business men on a particular day will discover that it suits them better, when a larger establishment is open, and when they are doing business in that locality, to shop there instead. Northern Ireland consists mostly of small and family businesses. Such businesses are not able to organise themselves in the way that large firms can be organised.
The fact that we sit on these Benches does not mean that we are not interested in the workers of Northern Ireland. It is interesting to note that the hon. Member for Belfast, West (Mr. Fitt), who, when

on a public platform, often talks of bread and butter issues, is never present in these debates when we are dealing with such issues. This is an issue that relates to the workers of Northern Ireland, and their voice must be heard. As this order has been laid as a result of pressure from big business, let us hear the voice of the ordinary people whose lives will be affected by these provisions and who will have to carry the burden.
I am interested in those people. I am also interested in the little man who, although he has been bombed and shot at, has set up again and put out his sign "Business as usual ". The big combines with the aid of their cash flow, are able to survive more easily, but some of the small business men have carried an unbearable burden.
The district councils will have the final say in what is done. I am glad that on this issue the elected representatives will have that final say. I am hopeful because those councils will contain representatives who will stand up for the workers. That is where the debate will take place.
It is better that the debate takes place on the local scene with local people than on the Floor of this House. We are too far away from these shops. I agree with my hon. Friend the Member for Londonderry that we do not all like the principle of this order. Perhaps the district councils will be able to sort it all out. I believe that the order need not have been laid at all.

11.23 p.m.

Mr. Pendry: I thank the hon. Member for Beckenham (Mr. Goodhart) for welcoming the order. He was right to say that there have been wade representations to the Department. Therefore, I was right to stress our concern following the comments of the hon. Member for Antrim, North (Rev. Ian Paisley). We are concerned about worker representations and their fears. We have gone some way to allay those fears.
There are a number of safeguards in this operation. First, the district council has to carry out a ballot of all registered traders, and the matter will go through only if two-thirds of these traders vote in favour. At that stage the small shopkeeper will have his say. Therefore, on


the arithmetic alone they should be in a strong position.
It is not true to say that district councils have the final word. That will lie with the Department of Finance. This is another tier of representations. I give the pledge that my Department will ensure that in such circumstances all objectors will be heard fairly. The picture is not as bad as has been painted.
Of the 11 district councils which replied to the departmental circular on this order, Ards, Carrickfergus, Castlereagh, Down, Larne, Newtownabbey, and North Down fully supported the proposals. That should be stated clearly. The remaining four—Craigavon, Londonderry, Magherafelt and Strabane—replied "No comment ". They all had their opportunity, and those who replied positively were in the majority.
I hope the House will recognise that the exercise has been thorough. There is still time, where district councils so wish, for representations to be made. On that basis, I commend the order to the House.

Question put and agreed to.

Resolved,

That the draft Shops (Northern Ireland) Order 1978, which was laid before this House on 22nd November, be approved.

AGORAPHOBIA

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Stallard.]

11.25 p.m.

Mr. Greville Janner: I am pleased to have the opportunity to raise the problems of sufferers from that most unfortunate illness which is called agoraphobia, an illness which afflicts an unknown number of people—unknown because very few of them are prepared to admit that they have it or to come forward to seek treatment. So many of them, indeed, are afraid or ashamed of admitting that they suffer from a disease which prevents them from going out, which gives them a morbid fear of public places, which makes them terrified of using public transport, and which often keeps them unnecessarily housebound.
Since raising the matter in the House and elsewhere, I have received a great number of letters from sufferers, most of them people who are unable to leave their homes, who are delighted that their problems are now being aired in the House so that there may be some prospect of their suffering being understood by others and of more help being given to them. But this morning I received an anguished telephone call from a psychologist in Leicester who said that we should not described agoraphobia as a disease. I received also a letter from a voluntary society saying that people should not be encouraged to think of agoraphobia as an illness which requires constant treatment and which might in any circumstances be incurable.
I have formed the view that, alas, agoraphobia is certainly an illuess and that those who suffer from it do indeed regard themselves as ill. It is a most disabling illness if we define disablement as a condition which prevents people from following their normal lives and careers. It is a disabling illness for an estimated 70,000 to 90,000 of our fellow citizens, many of whom suffer from other phobias at the same time.
I shall quote from two or three of the letters I have received. A gentleman writes that he could not go out, and he started a business at home. He says:
 I still remain an agoraphobic, but I know from long experience that the symptoms sometimes disappear for years at a time until some unfortunate incident stirs it up, even subconsciously, and we are off again. I have always kept this illness secret even from my wife and sons, and when today I mentioned that I was agoraphobic she jeered. Perhaps the lack of being able to discuss our plight does retard recovery.
People are ashamed. They are afraid of it. They do not even like to tell their own family.
A lady writes:
 I have been a victim for years, and I have known many others, some of them very young, whose lives are wasted. Drugs do not help. Many of us are of the opinion that it has something to do with the acids in the body, but I have good reason to think that even research is unable to help us. May God speed this effort. May you be successful in getting some help for this hellish illness.
I have received many sad letters, mainly from people in my constituency. As a result of the interest aroused, and of the efforts of a remarkable lady, Geraldine


Onions, who lives in Loughborough, a society has been formed, called Link-up, which held a meeting in Leicester a few weeks ago, where over 40 agoraphobics and their families came together. It was an immense achievement. Many of these people find great difficulty in going out. All of them had to fight the fear which they knew would come or could come. Most of them coped because they have loving relatives prepared to help them, but there were also people there, husbands and wives, representing those who could not get out of the house.
What help is it possible for us to provide for these people? First, through this House, I beg all who know sufferers from this illness and other phobias to look after their unfortunate neighbours over Christmas. Those who suffer mental or psychiatric illness suffer torment just as those who suffer physical illness do. At least one can say of a physical ailment that it can be seen and it may attract a measure of sympathy for that reason.
The sufferers of agoraphobia and other similar ailments receive little sympathy and understanding. Even their own families torture them by telling them to snap out of it in a way that is impossible. Over the Christmas period I beg people to assist those who cannot go out of their homes.
I ask that all possible support be given to voluntary organisations such as the Phobic Society, Open Door and Link-up. There are similar organisations in various parts of the country that are doing voluntary work and helping those who suffer from these ailments to help each other and themselves. I ask the Government, through my hon. Friend the Under-Secretary of State, to give support to the voluntary societies so that as many as possible of those who suffer from agoraphobia may be assisted to look after themselves and may avoid the totally unnecessary unhappiness and expense of institutionalisation.
Secondly, I ask my hon. Friend to pass on to my hon. Friend the Under-Secretary of State who has responsibilty for the disabled, my hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris), that great campaigner for the suffering, the wish of the members of Link-up in my constituency and the feelings of the vast majority of sufferers from agora-

phobia that they should qualify for a mobility allowance in the same way as those who are immobile as a result of physical ailments.
I know that within the organisations of those who seek to help the agoraphobics there is the feeling that money should not be spent on paying mobility allowance. However, from the people whom I have visited when on constituency rounds, who are unable to get out, who cannot use public transport, who cannot get to work and who cannot make a useful and happy living because they are unable to be mobile, I know that even a little help would enable them to have some form of conveyance so that they could get out into society and out to work
It is to be hoped that such people would recover. It is to be hoped that they would get better or even have a remission. It would be possible and reasonable for them to be required to state that and to renounce their allowance in the same way as sufferers from other illnesses are able to obtain help but cease to receive an allowance when they recover from their illnesses. I ask that special consideration be given to the granting of a mobility allowance to sufferers from agoraphobia and other psychiatric illnesses who are rendered immobile.
Thirdly, the Chronically Sick and Disabled Persons Act 1970, of which my hon. Friend the Minister with responsibility for the disabled was the father, has not been applied throughout the country with nearly the vigour, enthusiasm, care and thoroughness that was required. I ask my hon. Friend the Under-Secretary of State to give the House a categorical assurance that the Act applies as much to the mentally handicapped as it does to the physically handicapped. I am sure that he is aware of the widespread misunderstandings in that area throughout the country. Failure to apply the Act means that avoidable suffering among the mentally handicapped is prolonged. Once again, it results in entirely preventable institutionalising.
Finally, I ask for more funds for research into the baffling illness of agoraphobia. I was told today that there is a gentleman who says that he can cure it. I hope that he can, and I am sure that


for some people the cure is possible. Alas, for others it is not. We do not know the nature, origin, cause, methods of cure and diagnosis even of the illness of agoraphobia. Either the Government should provide funds for research or they should encourage others to undertake research. Priority should be given to such research.
The priority given to the mentally handicapped generally should be high on our scale of priorities. I appreciate that there arc problems of resources but the case of help for the mentally handicapped is strong. A person who is a serious sufferer from agoraphobia suffers from a most unpleasant, debilitating and unhappy illness.
Mrs. Onions and her colleagues in Linkup are proposing to organise the first-ever lobby of agoraphobics to come to this House. I hope that before the spring many agoraphobics all over the country will pluck up their strength and courage, join their comrades, come to this House and seek help for themselves and for others like them in a way that requires quite as much courage as the efforts of a physically handicapped person to get up and walk on legs that are immobilised.
When the agoraphobics come to the House they will seek to see my hon. Friend the Minister with responsibility for the disabled, and I ask my hon. Friend to convey to the Minister the respect and admiration of my constituents and their request that he should receive them when they make their way to this House. They will be symbolic of suffering. They will be symbolic of courage. They will be symbolic of the determination of people who are suffering from a disabling illness to help themselves. I hope that the Government and this House, all hon. Members and all our good citizens, will this Christmas give thought to those who are truly immobile and unable to leave their homes freely or at all because they suffer from the problems of the illness of agoraphobia.

11.37 p.m.

The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): I am grateful to my hon. and learned Friend the Member for Leicester, West (Mr. Janner) for bringing to the attention of the House tonight the problems faced

by those people unfortunate enough to suffer from agoraphobia. May I say I am deeply conscious of the very considerable distress which this condition can cause and have every sympathy, as has my hon. Friend the Minister with responsibility for the disabled, for sufferers and their families.
Perhaps I could just place this disease in the context of our general programmes for the mentally ill and the mentally handicapped.
The Government attach high priority to developing services for mentally ill and handicapped people, and in March 1978 national guidelines for forward planning were issued to health and local authorities, suggesting rates of growth to 1982 and indicating the major priority areas where service development and increased expenditure are needed. It is the Government's policy that the balance of care in these two fields should shift from the health services towards the personal social services.
It is envisaged that, in England as a whole, NHS capital and revenue expenditure on mentally ill and mentally handicapped hospital patients should increase in real terms by about 2 per cent. a year over the period 1976–77 to 1981–82. During this time the number of beds is expected to reduce so that the amount spent per bed would increase by over 44 per cent. a year. Expenditure on personal social services for the mentally ill and the mentally handicapped over these years is planned to increase by almost 9 per cent. a year. Over the same period a growth rate of 1·7 per cent. a year is projected for the NHS as a whole, and 2·1 per cent. for the health and social services as a whole.
Authorities were asked to spend about £9 million of the English share of the £50 million injection announced by my right hon. Friend the Chancellor of the Exchequer in his April Budget on psychiatric and geriatric hospital care, and, as my right hon. Friend the Secretary of State said in the debate on the Gracious Speech, he hopes to be able to announce further resources for the health and personal social services over and above the increases already planned.
Perhaps I may say a little about the nature of the condition. Agoraphobia means literally "fear of the market


place ", and an irrational fear of "going out" is the most frequent symptom from which others may develop; many anxieties may be present in patients said to be suffering from this condition. I understand that many people believe that the fear is more of separation from the home, based on the original separation of child from parent, than of open spaces. It is the most common of the non-specific phobias and varies from mild anxiety when away from home to patients who are completely housebound.
Studies show that women agoraphobics far outnumber men, and the stage of onset is usually between 18 and 35 years. Precise evidence on which to base an estimate of the number of sufferers from agoraphobia is not available, but in a recent study in this country it was found that about 3 per cent. of all people consulting a clinician about psychological problems suffered from a phobia as a main complaint. However, it is recognised that many people suffering from phobias do not seek psychiatric help, and voluntary bodies working in this field have estimated that there are as many as 300,000 people suffering to at least a minor degree from agoraphobia in this country.
Facilities for treatment are available under the National Health Service, and I understand that many agoraphobics do in fact receive considerable help from them. Some patients can be treated at home by their general practitioner; others may need to be referred to hospital for specialist psychiatric and psychological help, and in recent years considerable progress has been made in a number of centres in this country in developing treatments for phobic conditions, notably by using behavioural methods. The treatment of phobias has been transformed by the advent of such methods, which are now widely available. They were pioneered largely by psychologists and are mainly carried out by them. Such treatment is at present usually obtained through the hospital out-patient services, though in some places a system enabling the general practitioner to arrange for patients' treatment has been tried. The more specific the phobia, the better the prognosis with treatment, but even diffuse states have, I am advised, been treated successfully, particularly by such methods as, for example, taking the sufferer into the actual

situation that produces fear and either desensitising him gradually or, occasionally, over-exposing him. This sort of thing has been done on a domiciliary basis and this gives the opportunity to look at the family situation, which is often of particular importance. Special facilities for people suffering from agoraphobia separate from the general psychiatric services are not thought to be either desirable or required.
Apart from the treatment services provided as part of the health services, local authority social services departments are responsible under the National Health Service Act 1977 for providing care and after-care facilities for people suffering from mental illness. This, of course, includes people suffering from phobic states. Local authorities can provide day care services ranging from large day centres to small neighbourhood groups, clubs and so on which appear to be particularly helpful in many cases, social work help to the sufferers and their families, including therapeutic programmes and support, domiciliary care, and also residential care should this be required.
In addition—here I take up one of my hon. and learned Friend's main points —the powers which local authorities have under the Chronically Sick and Disabled Persons Act 1970 to assist different classes of disabled persons apply to people suffering from agoraphobia as to other mentally ill people. I think it is true to say that many people are not aware of the help that is available to them through local authorities under this Act. Hon Members, as my hon. and learned Friend emphasised, can play an important part in making sure that their own constituents who need such assistance are aware of the help which their own local authorities can give them. Under the Act, help can be provided in a number of ways—for example, help with telephone and television, adaptations to the house, and so on—some of which may on occasion be of benefit to agoraphobics, though, of course, it is for the local authority to determine what assistance should be provided in any individual case in the light of the particular needs and circumstances.
Jobs that can be done at home are hard to find, but, in addition to help


that local authorities can sometimes provide, the disablement resettlement officer at the Employment Service Agency is able to give advice about work aspects. I should emphasise that there are differing schools of thought about providing special facilities, such as a telephone, in the home for agoraphobics. Some hold to the view that such assistance only reinforces the phobia.
Voluntary organisations—another point emphasised by my hon. and learned Friend—also have a valuable role to play in influencing public opinion and encouraging a more understanding attitude towards the problems faced by people such as phobic sufferers. I know that sometimes local voluntary organisations can be very effective by forming self-help groups and support systems where members arc brought together and sustained by sharing a common problem. These help maintain self-respect and morale through a difficult period and combat loneliness and isolation. Individual volunteers can also be of great use in accompanying people suffering from agoraphobia when they go out and in providing transport to get someone to a therapeutic facility to take advantage of what is available.
Perhaps I should at this point say something about social security benefits as they concern agoraphobics. In so far as agoraphobics are considered to be incapacitated for work, they can, on production of medical evidence to this effect, usually qualify for sickness benefit, followed by invalidity benefit if the incapacity continues beyond 28 weeks, if their contribution record shows a recent history of employment or self-employment. Those who are unable to satisfy the contribution conditions for sickness or contributory invalidity benefit may be eligible for non-contributory invalidity pension, but married women have to show that they are also incapable of performing their normal household tasks because of their disablement. Alternatively, or additionally, the Supplementary Benefits Commission exists to help all those not in work whose resources are insufficient to meet their needs as assessed for supplementary benefit purposes. A few people suffering from agoraphobia are so severely disabled by other resultant

symptoms that they need the constant care of another person and may qualify for attendance allowance.
Some have suggested that agoraphobics should be entitled to mobility allowance —my hon. and learned Friend stressed that point—and I should like to clarify the situation. As I am sure my hon. and learned Friend will know, very careful thought was given to the scope of the mobility allowance scheme, more particularly in view of the limited financial resources available. The Government's main aim in introducing mobility allowance was to extend equal mobility help to those who are unable or virtually unable to walk, whether they can drive a vehicle or not. The scheme was therefore limited to people who could not get about at all through being unable or virtually unable to walk because of physical disablement. I very much appreciate that the scheme does not include all the people who have problems in getting about, but severe financial stringency made it essential to limit it.
Apart from agoraphobics, eloquent pleas have since been put to us on behalf of many groups of disabled people, including the blind and mentally handicapped. In reviewing their public expenditure programme, the Government will keep in mind claims for extending the scope of the allowance, but any proposals for change in the present schemes will have to be weighed against proposals put forward to the Government for extending the present level of help to the disabled and all other proposals for increases in public expenditure.
Turning now to the question of research which my hon. and learned Friend stressed, my Department has not funded and is not currently supporting research into the specific problem of agoraphobia, but we are able and prepared to consider proposals for research related to the provision of services for psychiatric disorders, including phobias, within my Department's research programme.
It might at this point be worth outlining the operation of that programme and how it relates to non-departmental research programmes, including that of the Medical Research Council, in this area. My Department has a system of research liaison groups to make decisions about departmental research. These bring


together senior administrative and professional staff concerned with the development of policy along with my chief scientist's advisers—mostly themselves distinguished researchers—and departmental research management staff, to consider applications for the funding of research. The criteria for the research liaison groups in commissioning research include, as one might expect, the scientific validity of any research proposal, its relevance to the policy needs of the Department and judgment of priorities in the allocation of funds.
There is a fruitful overlap of responsibilities between my Department, which has an important role in identifying problems regarding the causes, prevention and treatment of mental illness as they affect the provision of health and personal social services, and the Medical Research Council, whose principal role is to fund biomedical research to solve such problems. The research funded by the research liaison group is mainly related to the provision of services. Responsibilities for funding research are not, however, rigidly defined because the research liaison group, the Medical Research Council and the universities all share an interest in research into the prevalence and distribution of the different kinds of psychiatric disorder, the assessment of numbers in particular diagnostic categories, and the disabling effects of mental illness.
More specifically, I understand from my right hon. Friend the Secretary of State for Education and Science that the Medical Research Council has no research grants exclusively concerning agoraphobia, but two of its programme grants, with a total value in the last financial year of £97,000, include studies on phobia. These include research on the psychological treatment of psychoneurosis at the university of Oxford and therapeutic studies

of resistant neuroses at the Institute of Psychiatry in London. My hon. and learned Friend will also be interested to know that some years ago the Medical Research Council's unit for epidemiological studies in psychiatry at Edinburgh carried out some research into the clinical, familial, psychological and social aspects of agoraphobia in housewives. I should also mention that one study recently accepted for funding on the Department's side—that is, by the mental illness research liaison group—,on which we are likely to spend about £50,000 in the next two to three years, its concerned with methods of giving behavioural treatments. It is therefore hoped that it will be of direct benefit to sufferers from agoraphobia among other comparable disorders.
My lion and learned Friend mentioned a lobby of constituents and others suffering from this problem. I know that my hon. Friend the Minister responsible for the disabled is well aware of the problems of people suffering from agoraphobia and other phobias. I am sure that he will give sympathetic consideration to any request for him to meet my hon. and learned Friend's constituents on their lobby.
In conclusion, may I emphasise the concern and sympathy which the Government have for sufferers of agoraphobia and their families. Although no doubt there is much more which could be done to help them, given both unlimited resources and greater knowledge of the condition, I hope the House will agree that considerable help is presently available.

Question put and agreed to.

Adjourned accordingly at twelve minutes to Twelve o'clock.